U.S. investment bank Bear Stearns Cos.
Inc. on Tuesday reported a 15 percent decline in fiscal
second-quarter results due to a steep drop in investment banking
fees, but still beat Wall Street expectations.
The company earned $135.9 million, or 88 cents a share, in
the second quarter ended December 31, compared with a net income
of $160.2 million, or $1.11 a share, in the year-ago period. The
results, however, easily beat Wall Street expectations of 63
cents a share, which had been ratcheted downward following this
summer's financial turmoil.
Investment banking revenues dropped 41 percent in the
quarter to $163.7 million, from $278.9 million, as the firm
derived fewer revenues from underwriting stock and debt
offerings. Bear Stearns also attributed the drop to a decline in
fees from advising companies on mergers and acquisition, but did
not detail the drop.
Like other U.S. securities firms, Bear Stearns benefited
from increased stock trading revenues in the quarter. Commission
revenues rose 10.5 percent to $254.7 million, from $230.5
million in the year-ago quarter, because of higher clearing and
Principal transactions revenues from making markets in
securities and trading for the firm's own account rose 7.3
percent to $419 million, from $390.5 million in the year-ago
quarter, due to strong results in mortgage-backed securities,
government bonds, derivatives, and arbitrage trading.
The segment's robust results contrasted with the drop in
principal transactions other U.S. securities firms, such as
Merrill Lynch and Co. Inc. have reported for the quarter. Bear
Stearns attributed the increase to increased customer activity
and tight risk management procedures.