Alexander Services' earnings improve In 1995, company reversed heavy losses from previous year

February 15, 1996|By Kevin L. McQuaid | Kevin L. McQuaid,SUN STAFF

Alexander & Alexander Services Inc. yesterday reported much-improved earnings for 1995, the result of a substantial restructuring the consulting and insurance brokerage firm undertook two years ago.

The New York-based company in 1995 generated net income of $89.4 million, or $1.44 per share, reversing a loss of $138.7 million, or $3.51 per share, the year before.

Although its headquarters is in Manhattan, the company employs almost 500 at its administrative office in Owings Mills. It has more than 250 workers at a sales office in Baltimore as well.

The 1995 earnings included a fourth-quarter pre-tax charge of $17.6 million, resulting primarily from its October acquisition of Jardine Insurance Brokers Inc., the U.S. retail arm of JIB Group PLC of London, as well as a $28.7 million pre-tax gain from the sale of a subsidiary. In 1994, Alexander & Alexander took a $167.6 million charge for restructuring.

Revenues for 1995 were $1.3 billion, down 3.1 precent from the prior year. Excluding sold operations and sales from acquired assets, revenue rose 4.4 percent, or $53 million. Operating expenses for the year fell 17.5 percent to $1.16 billion.

"As a result of our successful restructuring, all operations contributed to A&A's significant increase in income," said Frank G. Zarb, chairman and chief executive, in a prepared statement.

In the fourth quarter ended Dec. 31, the company generated net income of $7.5 million, or 2 cents per share, vs. a net loss of $111.3 million, or $2.66 per share, in the year-ago period.

Revenues in the quarter were $330.4 million, essentially flat from a year ago. Quarterly operating expenses decreased by 28 percent, to $316.2 million.

"In 1996, highly competitive business conditions will continue to constrain revenue growth," Mr. Zarb said.

"To meet our long-term business objectives, we are making significant investments in information technology, product development and employee training. These initiatives will put added short-term pressure on earnings, but the financial benefits should become increasingly evident in 1997 and beyond," he said.

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