PaineWebber Group Inc., one of the
nation's largest brokerages, on Tuesday posted an 8 percent drop
in fourth-quarter profits due to weak trading and investment
banking revenues, but still beat Wall Street estimates.
The firm, which employed a company record 6,951 brokers at
year-end, earned $100.4 million, or 63 cents a share, in the
fourth quarter ended Dec. 31. The results fell below the $108.7
million earnings, or 68 cents a share, PaineWebber posted in the
year-ago quarter, but surpassed Wall Street expectations of 55
cents a share.
Principal transactions revenues from market making in
securities and trading for the firm's own account dropped 22
percent in the fourth quarter to $199.2 million, from $254.6
million, as the firm wrestled with the aftershocks of this
summer's financial turmoil. Investment banking revenues also
declined to $109.7 million, from $122.9 million in the year-ago
On the plus side, commission revenues rose 7 percent to
$420.2 million, from $392.3 million in the year-ago quarter,
thanks to strong stock trading volumes on U.S. exchanges. Asset
management fees rose 21 percent to $188.0 million, from $154.8
million, as the firm increased its assets under management
nearly 20 percent to a record $58.5 billion.
In all, PaineWebber's clients held a record of $352 billion
in their accounts at year end, up 18 percent from the $297
billion a year ago. The firm's client assets have grown by an
annual compounded rate of 20.4 percent in the last five years.
For the full year, the 119-year-old firm posted record
profits of $433.6 million, or $2.72 a share, compared with net
earnings of $415.4 million, or $2.56 a share, in 1997. Net
revenues rose 7 percent to a record 4.4 billion in 1998, up from
$4.1 billion in 1997.