Alex. Brown says earnings fell 40 percent

BY THE NUMBERS

January 31, 1991|By Peter H. Frank

Hit by a slump that ran through the whole securities industry, Alex. Brown Inc. reported sharply lower earnings for the fourth quarter of last year compared with the same period a year earlier.

Alex. Brown, a Baltimore-based investment banking company that operates primarily through Alex. Brown & Sons Inc., said its earnings fell more than 40 percent, to $3.8 million, or 26 cents a share, for the three months ended Dec. 31. That compared with earnings of nearly $6.4 million, or 39 cents a share, in the comparable 1989 period.

Like many of its competitors, Alex. Brown was hurt primarily by an evaporating interest in new stock as war fears mounted at the end of last year.

Although the company was the most active underwriter of common stock offerings during the year, according to Chairman Benjamin H. Griswold IV, its investment banking revenues for the final three months of the year dropped to $21.5 million from $32.3 million a year earlier.

Alex. Brown either managed or co-managed 50 public offerings last year, down only slightly from 52 offerings in 1989, said Beverly L. Wright, the company's chief financial officer.

"In light of the change in market conditions, we were quite pleased with investment banking results for the fourth quarter," Ms. Wright said.

Mr. Griswold said in a statement that he was pleased with the overall results for year, pointing out that revenue from commissions increased 8 percent, to a record $68 million, and that assets under management grew 21 percent, to $6.4 billion.

"Alex. Brown achieved some notable successes in 1990, despite the difficult conditions which prevailed in the securities markets throughout much of the year," Mr. Griswold said. "The firm also achieved growth in revenues from merger and acquisition advisory work, despite the general contraction in this business experienced by the industry as a whole."

The company also said its board approved a common stock dividend of 7 cents a share, payable Feb. 20 to stockholders of record Feb. 11.

Helping fourth-quarter earnings last year was a one-time gain of $2 million before taxes that resulted from the company's decision not to dispose of certain office space in its New York City operations. Alex. Brown originally had recorded a $9.4 million loss in early 1989 when it cut back on expansion plans and disposed of unneeded offices here and in New York.

But after expanding its New York retail operations last year to 52 brokers from 37 at the end of 1989, the company reversed its decision and chose to keep the additional office space, leading to the $2 million gain, Ms. Wright said.

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