Last year was good, but this year is better, Alex. Brown Inc. said yesterday as it announced that its first-quarter profits rose 58 percent.
The Baltimore investment banking company snapped out of an industrywide recession early last year, as the Persian Gulf war sent the stock market soaring. That quarter brought a bigger profit than Alex. Brown saw for all of 1990, and this year's first quarter was better still.
"We went into the first quarter this year with a good backlog of business in the pipeline on the investment banking side, which was not the case in 1991," said Beverly L. Wright, Alex. Brown's chief financial officer and a managing director.
Alex. Brown has managed or co-managed 29 stock offerings this year, Ms. Wright said, up from 21 in the first quarter of 1991. Investment banking revenue jumped 59 percent.
Ms. Wright said the investment banking business doesn't recover from downturns such as the one the industry suffered in 1990 until the stock market perks up. When the market started heating up early last year, Alex. Brown didn't have offerings ready because of the pessimism that had dominated the fall of 1990. This year, coming off a market rally in late 1991 fueled by falling interest rates, Alex. Brown was in a better position to capitalize on a reasonably strong first-quarter market, she said.
The strong stock market indirectly helped Alex. Brown's investment banking business, but it gave commissions on securities trades a more direct boost. Commission revenue in the quarter rose 45 percent. Revenue from principal transactions -- which include over-the-counter stocks -- rose 23 percent.
The company's compensation expenses also rose sharply, but Ms. Wright said much of that was caused by higher commission payments reflecting increased business.
Alex. Brown's stock closed at $15.50 a share yesterday, down 12.5 cents on the New York Stock Exchange.
Three months ended 3/27/92
.. .. .. .. .. Revenue .. ... Net .. .. .. Share
'92 .. .. 124,155,000 .. .. 16,821,000 .. ..0.99
'91 .. ...93,597,000 .. ..10,625,000 .. ..0.66
% change .. ... +32.6 .. .. .. . +58.3 .. . +50.0