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EARNINGS

Merrill Lynch Slips, Paine Webber Gains

October 29, 1985

Merrill Lynch & Co. reported that its third-quarter profits totaled less than half of the amount that it earned a year earlier but noted that the previous's year results included extraordinary gains of about $55 million.

In a separate financial statement, Paine Webber Group said its earnings for the fiscal year ended Sept. 30 grew to $33.8 million, up significantly from the $13 million that it reported a year earlier.

For the third quarter, which covered 13 weeks ended Sept. 27, Merrill Lynch, the worldwide financial-services firm, reported after-tax earnings of $38.4 million, down from last year's $80 million.

But last year's results benefited from the sale of the building housing Merrill Lynch headquarters in the Wall Street financial district.

Sale of the One Liberty Plaza building added $46 million to third-quarter 1984 net income. A gain of $9 million stemming from tax law changes was also added to last year's third-quarter income.

Without those one-time gains, Merrill Lynch would have earned $25 million in the third 1984 quarter.

Revenue in the third quarter grew to $1.75 billion from $1.66 billion in the year before.

Chairman William A. Schreyer and President Daniel P. Tully said Merrill Lynch has improved its financial posture this year but will still strive to keep costs under control.

Paine Webber Chairman Donald B. Marron said the brokerage's 1985 financial performance was enhanced by strength during the fourth quarter in commission and investment banking businesses.

For the fiscal year, Paine Webber reported revenue of $1.89 billion in 1985, up from $1.55 billion in the 1984 fiscal year.

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