Alex. Brown continues to show strong results First-quarter profit more than double that of same period in '95

April 20, 1996|By Mark Hyman | Mark Hyman,SUN STAFF

Alex. Brown Inc., the venerable Baltimore investment bank, continued its strong showing of last year, reporting a doubling of its first-quarter net income yesterday, gains credited to its investment banking and trading operations.

Alex. Brown earned $40.7 million, or $2.51 a share, compared with $16.4 million, or $1.10, in the same period a year earlier.

The earnings came on a 79 percent increase in revenue to $270.8 million from $151.3 million.

A. B. "Buzzy" Krongard, Alex. Brown's chairman and chief executive, said the earnings reflected the company's continued strength, after reaching record earnings in 1995.

"We've been lucky and we've been able to take advantage of opportunities we've been presented with," said Mr. Krongard, who credited some of Alex. Brown's success to an improving national economy. "There's only so much you can do when there's a stiff head wind in your face."

In the first quarter, Alex. Brown rode strong revenue increases in investment banking and trading operations.

Investment banking revenue jumped to $101.8 million from $39.6 million, in part, because of an increase in underwriting and merger advisory fees.

Commission revenue increased to $52 million from $39.6 million. Also, trading revenue grew to $52.4 million from $28.9 million last year.

"They had a record year in 1995, and, with earnings like the first quarter, it's obvious Brown's management is off to a very strong start in 1996," said Perrin H. Long, an independent analyst covering the securities industry.

"Assuming the economy remains somewhat favorable and that interest rates are not raised sometime between now and the [presidential] election, it's highly likely Brown will have record revenues and profits again in 1996."

Alex. Brown's stock closed at $50.125 yesterday, up $1.875 or 4 percent.

Yesterday's earnings continue a streak of profitable earnings periods for Alex. Brown. Last year, results were the best in the company's 195-year history, surpassing the previous record established in 1993.

In 1995, the investment banking and brokerage firm reported revenues of $809.4 million, up 34 percent from 1994.

Primary earnings per share were $6.16 for 1995, up 34 percent for the year, and $2.08 in the fourth quarter, up 55 percent.

Pub Date: 4/20/96

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