Bear Stearns Reports 4Q Profit Rise
AP
Bear Stearns Reports 4Q Profit Rise
Thursday December 14, 11:43 am ET
By Joe Bel Bruno, AP Business Writer
Bear Stearns 4Q Profit Rises 38 Percent, Best Quarter in Company's History
NEW YORK (AP) -- Bear Stearns Cos., the fifth-largest U.S. investment house, on Thursday reported fourth-quarter profit surged 38 percent to a company record for any quarter as an unprecedented period of takeover activity powered fees from debt underwriting and acquisition advice.
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The New York-based company also reported a fifth-straight record year for profits. Rivals Goldman Sachs Group Inc. and Lehman Brothers Holdings Inc. also produced record profits for the quarter and year.
Bear Stearns reported profit attributable to common shareholders rose to $557.6 million, or $4 per share, in the three months ended Nov. 30 from $401.5 million, or $2.90 per share, a year earlier. Revenue rose 28 percent to $2.4 billion from $1.9 billion.
The results surpassed Wall Street projections for earnings of $3.36 per share on $2.2 billion in revenues, according to analysts polled by Thomson Financial.
Its shares rose $2.48, or 1.6 percent, to $158.37 in morning trading on the New York Stock Exchange.
"We are pleased to announce Bear Stearns' fifth consecutive year of record net income and earnings per share," said Chairman and Chief Executive James E. Cayne in a statement.
Cayne's build up of Bear Stearns' merger and acquisition business appeared to pay off during the quarter. Investment banking revenue rose 58 percent to $364 million.
Not only is Bear Stearns advising companies on M&A, but they're also helping to fund the deals. The record year of takeover activity pushed revenue from its fixed income business up 25 percent to $1.1 billion.
The company also said its mortgage-backed securities business increased during the quarter, reflecting higher volumes and increased commercial securitization activity. Bear Stearns is Wall Street's biggest packager of home loans into bonds, and has not seen the kind of robust returns it once did as the housing sector continues to slump.
Six straight months of gains by the Standard & Poor's 500 index, with the Dow Jones industrial average reaching a new all-time high, was a boon for Wall Street. Bear Stearns reported that revenue from its institutional equities business rose 7 percent to $397 million, while fixed income gained 25 percent to $1.1 billion.
Meanwhile, the record stock market run also caused its money management and wealth management revenue to jump 33 percent to $245 million. Assets being managed in the business rose to $52.5 billion from $41.9 billion during the third quarter.
Results topped a banner year for Bear Stearns, which reported full-year profit surged to $2.03 billion, or $14.27 per share, from $1.44 billion, or $10.31 a share, a year ago. Revenue rose to $9.23 billion from $7.4 billion a year ago.
Bear Stearns Reports 4Q Profit Rise
Thursday December 14, 11:43 am ET
By Joe Bel Bruno, AP Business Writer
Bear Stearns 4Q Profit Rises 38 Percent, Best Quarter in Company's History
NEW YORK (AP) -- Bear Stearns Cos., the fifth-largest U.S. investment house, on Thursday reported fourth-quarter profit surged 38 percent to a company record for any quarter as an unprecedented period of takeover activity powered fees from debt underwriting and acquisition advice.
ADVERTISEMENT
The New York-based company also reported a fifth-straight record year for profits. Rivals Goldman Sachs Group Inc. and Lehman Brothers Holdings Inc. also produced record profits for the quarter and year.
Bear Stearns reported profit attributable to common shareholders rose to $557.6 million, or $4 per share, in the three months ended Nov. 30 from $401.5 million, or $2.90 per share, a year earlier. Revenue rose 28 percent to $2.4 billion from $1.9 billion.
The results surpassed Wall Street projections for earnings of $3.36 per share on $2.2 billion in revenues, according to analysts polled by Thomson Financial.
Its shares rose $2.48, or 1.6 percent, to $158.37 in morning trading on the New York Stock Exchange.
"We are pleased to announce Bear Stearns' fifth consecutive year of record net income and earnings per share," said Chairman and Chief Executive James E. Cayne in a statement.
Cayne's build up of Bear Stearns' merger and acquisition business appeared to pay off during the quarter. Investment banking revenue rose 58 percent to $364 million.
Not only is Bear Stearns advising companies on M&A, but they're also helping to fund the deals. The record year of takeover activity pushed revenue from its fixed income business up 25 percent to $1.1 billion.
The company also said its mortgage-backed securities business increased during the quarter, reflecting higher volumes and increased commercial securitization activity. Bear Stearns is Wall Street's biggest packager of home loans into bonds, and has not seen the kind of robust returns it once did as the housing sector continues to slump.
Six straight months of gains by the Standard & Poor's 500 index, with the Dow Jones industrial average reaching a new all-time high, was a boon for Wall Street. Bear Stearns reported that revenue from its institutional equities business rose 7 percent to $397 million, while fixed income gained 25 percent to $1.1 billion.
Meanwhile, the record stock market run also caused its money management and wealth management revenue to jump 33 percent to $245 million. Assets being managed in the business rose to $52.5 billion from $41.9 billion during the third quarter.
Results topped a banner year for Bear Stearns, which reported full-year profit surged to $2.03 billion, or $14.27 per share, from $1.44 billion, or $10.31 a share, a year ago. Revenue rose to $9.23 billion from $7.4 billion a year ago.
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