Primerica results exceed expectations: Financial services group and Chase Manhattan surprise Wall Street analysts
Tuesday 20 July 1993
One of America's largest banks, Chase Manhattan, meanwhile, reported a similarly large profit, surprising most analysts.
Primerica made dollars 177m, or dollars 1.02 a share, compared with dollars 165m, or 90 cents a share, for the same period in 1992, exceeding Wall Street's estimates. Operating profits for Smith Barney, which is to acquire Shearson's brokerage and asset-management divisions at the end of the month, set a record, rising more than 25 per cent to dollars 57.7m.
The company also realised dollars 24m in gains on its share portfolio, notably from its controlling stake in the Travelers insurance group.
Primerica's turnover was only slightly above that of last year's second quarter, at dollars 1.28bn, and was actually lower for the first half of the year. Trading revenues were down from the year before, while investment banking turnover was up sharply.
The second quarter, which ended on 30 June, will be the last before Primerica concludes the dollars 1.15bn merger of Smith Barney and Shearson. Financing for the purchase reduced second-quarter earnings by about four cents a share, Sandy Weill, the chief executive, said.
Chase's second quarter surpassed the most optimistic estimates on Wall Street, with profits up 53 per cent to dollars 233m, or dollars 1.20 a share, on the strength of record trading gains. The year before, Chase, America's fourth-largest money-centre bank, made dollars 152m in the quarter, or 83 cents a share.
Trading revenues, which totalled dollars 187m, were strong both in the aggregate and for derivative products and emerging markets. Chase's performance suggests that other big US banks that report this week - including Citicorp, BankAmerica, Nationsbank and Chemical - will also show better-than-expected profits on their trading accounts, analysts said yesterday.
The other surprise in Chase's results was in the improvement in credit quality. While banking specialists were expecting some decline in non-performing assets, net charge-offs were down dollars 63m to dollars 224m from the same quarter in 1992.
The bank's provision for possible credit losses was also lower, at dollars 225m, down dollars 70m from the year before. Net interest margin continued to be strong at 4.1 per cent.
The outlook for other bank shares is very positive, several industry analysts said. 'It's full throttle for the money centres,' Diane Glossman, senior analyst with Salomon Brothers in New York, said.
In afternoon trading, Chase shares were up 1 4 at 323 4 .
- 1 Howard Jacobson: Let's see the 'criticism' of Israel for what it really is
- 3 Do you know this man? Amnesia sufferer found in park pleads for help in identifying who he is
- 4 PornHub begs users to stop uploading video clips of Brazil getting beaten 7-1
Game of Thrones author George RR Martin says 'f*** you' to fans who fear he will die before finishing Westeros saga
Jennifer Lawrence face palms Emma Watson at Christian Dior show in Paris
Mick Jagger denies being World Cup curse and reason for Brazil’s embarrassing defeat
Gingers face extinction due to climate change, scientists warn
Do you know this man? Amnesia sufferer found in park pleads for help in identifying who he is
Sustained immigration has not harmed Britons' employment, say government advisers
British jihadist calls for 'flag of Islam' over Downing Street and Buckingham Palace
Australia facing international condemnation after turning around Sri Lankans at sea
7/7 memorial defaced on anniversary of 2005 attacks with ‘Blair lied thousands died’ graffiti
Even when it brutalises one of its own teenage citizens, America is helpless against Israel
There’s a nasty smell in the political air – and it’s coming from the Tories
iJobs Money & Business
£60000 - £75000 per annum: Harrington Starr: Business Analyst Consultant (Fina...
£60000 per annum: Harrington Starr: A leading provider in investment managemen...
£600 - £700 per day: Harrington Starr: AVS, JVS Openlink Endur Developer JVS, ...
£30000 per annum: Harrington Starr: A global leader in trading platforms and e...