Second Quarter Net Earnings Total $541 Million
Merrill Lynch reported second-quarter net earnings of $541 million today. That's 41% lower than the firm's second-quarter earnings a year ago. Year-to-date net earnings are $1.4 billion, down 30% from last year, according to the company.
The firm's Corporate and Institutional Client Group represented the largest part of the overall decline with earnings of $534 million, down 49% from the second quarter of 2000.
Second quarter earnings for Merrill Lynch Investment Managers totaled $106 million, a 23% decline from the same period a year ago, but a 3% increase from the first quarter this year. Merrill Lynch Investment Managers closed the second quarter with $553 billion in asset under management, down $32 billion from the same period a year ago.
'Compared with the year-ago quarter, MLIM's earnings have been adversely affected by a market driven decline in the value of assets under management,' according to a company statement. 'However, savings from actions taken to reduce expenses and rationalize the investment platform are being realized increasing the underlying profitability of the business.'
Part of the reduced expenses came from a 23% reduction in advertising and market development expenses, according to the company. The firm has also reduced its staff by 3,800, approximately 5%, this year. Still, net revenues for MLIM were $559 million, down 8% from the second quarter of 2000.
'Our second-quarter performance underscores the difficult market conditions, particularly in our secondary equity business,' said David Komansky, chairman and CEO of Merrill Lynch, in a statement.
The firm is confident that it can still achieve its 2003 financial goals, Komansky added, but projections for the third-quarter of this year look worse than the second, according to Thomas Patrick, Merrill's CFO. 'The revenue outlook remains uncertain through what is normally a seasonally slow summer period,' said Patrick. 'Without a significant improvement in market conditions from June levels, it is likely that our third-quarter earnings would be lower than the second quarter.'