Salomon leaps ahead with record earnings in first half
Your support helps us to tell the story
From reproductive rights to climate change to Big Tech, The Independent is on the ground when the story is developing. Whether it's investigating the financials of Elon Musk's pro-Trump PAC or producing our latest documentary, 'The A Word', which shines a light on the American women fighting for reproductive rights, we know how important it is to parse out the facts from the messaging.
At such a critical moment in US history, we need reporters on the ground. Your donation allows us to keep sending journalists to speak to both sides of the story.
The Independent is trusted by Americans across the entire political spectrum. And unlike many other quality news outlets, we choose not to lock Americans out of our reporting and analysis with paywalls. We believe quality journalism should be available to everyone, paid for by those who can afford it.
Your support makes all the difference.Salomon Brothers yesterday became the latest Wall Street firm to stun investors with much better than expected earnings, reporting a $291m (pounds 188m) net profit in the second quarter ending 30 June, from a $60m loss in the corresponding period. Added to a $276m net profit during the first three months of the year, Salomon reaped its most profitable first half in its history, with net profits of $567m. Its results, far exceeding analysts' expectations, placed it among a long list of top Wall Street firms reporting record first-half net earnings.
Perrin Long, a veteran securities industry analyst, and private consultant to investment firms, said: "The results for most of the companies have been very favourable compared to results ending June 1995."
However, he warned that the first half could be followed by a gloomier final six months of the year. First-half results were boosted by a booming stock market as more than $115bnpoured into equity mutual funds, and US corporates embarked on a mergers and acquisitions frenzy.
"The primary strength was in equity underwriting, and mergers and acquisitions activity, which made up for a pull-back in fixed income underwriting," said Sally Krawcheck, securities industry analyst at Sanford C Bernstein in New York.
However, analysts also argue that the stock market correction in the first weeks of July radically changed the equity underwriting picture. "With the stock market so volatile, along with the uncertainty about interest rates, I feel that the [equity] underwriting pipeline has gone for the moment. We could see significant drops in quarter-on-quarter earnings. If the stock market calms down, we may see strong earnings in the second half, " Ms Krawcheck said.
If the market stabilises, Wall Street could see a record full-year, pre-tax earnings level of $9.5bn in 1996, according to forecasts by Perrin Long.
Subscribe to Independent Premium to bookmark this article
Want to bookmark your favourite articles and stories to read or reference later? Start your Independent Premium subscription today.
Join our commenting forum
Join thought-provoking conversations, follow other Independent readers and see their replies
Comments