Merrill Lynch First Quarter Net Up 11% To Record $518m

Merrill Lynch & Co Inc yesterday reported an 11 per cent jump in first-quarter profits to a record $518 million, exceeding Wall Street

estimates in a performance driven by strong gains in most of its businesses and by the booming financial markets.

The nations largest retail brokerage said earnings per share were $1.30 on a diluted basis, beating the consensus First Call estimate of $1.17 by 14 per cent. In the 1997 quarter, Merrill earned $466m, or $1.17 a share.

Quarterly revenues also hit a record of $4.6 billion. Commission revenues grew by 23 per cent to $1.4 billion, thanks to an increase in the volume of global listed securities and to strong US mutual fund activity, while investment banking revenues rose 32 per cent to $801 million, helped by near-record underwriting revenues.

Merrill said it continued to reap the benefits of its $5.1 billion acquisition last November of Britains Mercury Asset Management Group Plc, whose assets have risen $13 billion from the end of 1997, to $180 billion. Merrills asset management and portfolio service fees ballooned by 50 per cent to $970 million in the first quarter.

Inflows of new funds into client accounts averaged more than $600 million per business day, leading to record levels of commissions and asset management fees, chairman David Komansky and president Herbert Allison said in a joint statement. Merrill said it ranked first in debt underwriting, equity and equity-linked underwriting, and mergers and acquisitions the three major global categories for investment banking.

Analysts said financial firms like Merrill were under increasing pressure to forge new alliances after the mega-merger announced last week between Travelers Group Inc and Citicorp.