[clari.biz.finance.services] Bear Stearns reports quarterly earnings

clarinews@clarinet.com (ELLEN WULFHORST, UPI Business Writer) (01/19/90)

	NEW YORK (UPI) -- Bear Stearns Cos. reported second-quarter earnings
Thursday, showing a rebound from the previous quarter but a sharp
decline from a year ago due to poor conditions in debt and equity
markets, risk arbitrage and mergers and acquisitions.
	Net income for the quarter ended Dec. 31 was $29.1 million, or 29
cents a share, off 54 percent from the same period a year ago when the
company showed net income of $63.3 million, or 63 cents a share, in the
best quarter in its history, Bear Stearns said in a statement.
	Quarterly results were up 32 percent from $22.1 million, or 22
cents per share, in the previous quarter ended Sept. 29.
	In the securities industries, analysts measure performance on a
quarter-to-quarter basis, due to the fast-paced nature of the business.
	Revenues for the latest quarter were $578 million, off from $632.6
million in the year-ago period.
	The company said it was pleased with its performance for the
quarter, which included the Oct. 13 mini-crash when the Dow Jones
Industrial Average plunged 190 points.
	The quarter was one of ``unfavorable market conditions in both the
debt and equity markets, a lack of risk arbitrage opportunities and a
decrease in merger and acquisition activity,'' the company said in a
	``The performance of all of our operating departments confirms that
the company consistently is able to produce profits during challenging
market conditions,'' said Alan C. Greenberg, chairman and chief
executive officer.
	He added that Bear Stearns believes it has ``the ability to add
talented professionals throughout the firm.'' Many firms in the
securities industry have been laying off employees in a continuing
fallout from the October 1987 stock market crash.
	Analysts agreed that Bear Stearns fared better in the poor
environment than other Wall Street firms that have been predicting bleak
end-of-the-year results.
	``What explains it is senior management and traders at Bear Stearns
are good,'' said Gary Hovis, an analyst at Argus Research. ``They can
make money in a bad market and other brokerages can't seem to do that.''
	Bear Stearns was not heavily involved in areas such as the retail
business or investment banking, whhere there has been a slowdown in
activity, said Perrin Long Jr., an analyst with Lipper Analytical.
	Also, he said, Bear Stearns has benefited by its highly
cost-conscious attitude.
	``Management has a culture that costs are the most important
thing,'' Long said. ``They save paper clips. They save rubber bands.
Other firms don't have that kind of culture.
	``What hits firms when times are poor is the whole question of
fixed costs. If they have a high cost of operations, they get hurt when
times are slow,'' he said. ``Bear Stearns' cost of operations has never
been as high as at other firms.''
	Brokerages such as Shearson Lehman Hutton have predicted
``horrendous'' quarterly results and, overall, the industry average will
proabably be off some 25 percent, he said.
	Other publicly traded brokerage firms are scheduled to release
their latest earnings reports over the next few days.
	For the six months ended Dec. 31, net income was $51.2 million, or
51 cents a share, off 39 percent from $83.8 million, or 82 cents a
share, a year earlier. Six-month revenues were $1.2 billion, compared
with $1.1 billion a year earlier.
	Bear Stearns also declared a 5 percent common stock dividend and a
14 cent quarterly cash dividend.
	The 5 percent stock dividend marks the fourth time in the past 18
months the company has increased the dividend on common stock either
through cash or stock dividends, the company said.
	``The board's action today reflects our confidence in where the
company is going and our satisfaction with the results of the first six
months of fiscal 1990,'' Greenberg said.