Alex. Brown's profits up 38.8% dividend raised

October 21, 1992|By David Conn | David Conn,Staff Writer

Alex. Brown Inc., a Baltimore-based investment banking company, reported a nearly 40 percent increase in third-quarter earnings yesterday and moved to share the wealth with its stockholders by increasing its dividend by 25 percent.

In the three months that ended Sept. 30, the company earned $11.1 million, or 71 cents a share, compared with earnings of $8 million, or 51 cents a share, in last year's third quarter.

The company's stock closed at $17 yesterday, up 50 cents a share on the New York Stock Exchange.

Alex. Brown's board of directors voted yesterday to increase the quarterly dividend. The board raised the common stock dividend to 12.5 cents a share from 10 cents a share. It was the fifth dividend increase since Alex. Brown went public in 1986. The dividend will be paid Nov. 10 to stockholders of record Oct. 30.

"We continue to emphasize balance sheet strength," Alvin "Buzzy" Krongard, the chief executive officer, said in a statement. "With stockholders' equity of $253.2 million at the end of the third quarter, Alex. Brown is extremely well capitalized."

The strongest earnings driver in the quarter was the company's investment banking division, which manages stock and bond offerings and advises in mergers and acquisitions. The $39.6 million in investment banking revenues represented a 44 percent increase over the third quarter last year. The division accounted for almost 38 percent of Alex. Brown's third-quarter 1992 revenues of $104.7 million.

Most of that money came from underwriting stock and bond issues, according to Beverly Wright, the chief financial officer. Alex. Brown was ranked fourth in the nation for initial public offerings during the quarter, according to Securities Data, a research firm.

Alex. Brown was either manager or co-manager on 18 issues, compared with 15 in the third quarter of last year, Ms. Wright said.

"Strong revenue levels in all businesses and the continued effectiveness of expense and risk controls enabled us to report a very solid quarter," Mr. Krongard added. He said the company's pre-tax profit margin was 17 percent during the quarter, and the return on investment was 22 percent for the first nine months of the year.

( Three months ended 9/30/92

. . .. .............Revenue. . . ........ Net... ............ Share*

'92.. ............ 104,654,000...........11,126,000.......... 0.67

'91................ 85,665,000...........8,017,000.......... 0.48

% change................. +22.2............... +38.8. ........ +39.6

Nine months ended 9/30/92

. ...............Revenue.. .............. Net................ Share*

'92............327,669,000.............37,554,000........... 2.24

'90........... 284,404,000............ 32,844,000........... 1.99

% change............. +15.2.................. +14.3........... +12.6

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