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EARNINGS

Merrill Lynch Posts Sharp Gain in Income for 1986

January 27, 1987

Merrill Lynch & Co. reported that its 1986 earnings soared 103% to an all-time high of $454.3 million, up from $224.3 million in 1985. Revenue rose 35% to a new high of $9.61 billion from $7.12 billion in 1985.

The nation's largest investment firm said its net earnings for the last three months of 1986 rose to $182.8 million from $62.7 million in the final quarter of 1985.

The New York-based company said its fourth-quarter earnings surged from a year earlier, partly because of one-time gains from the sale of its leasing subsidiary.

Earnings included an after-tax gain of $105.2 million from the sale of its leasing subsidiary, as well as an after-tax loss of $14.8 million from the early recall of certain medium-term debt issues to take advantage of lower interest rates.

Operating revenue, excluding the one-time factors, rose 46% in the quarter, including gains of more than 35% in the commission, investment banking, asset management and custodial fee areas, Merrill Lynch said in a news release.

Interest revenue rose by 19%, interest expenses rose 22% and non-interest expenses jumped 35% on the year. The company said its insurance revenue nearly tripled during the year, to $648 million, bolstered by the popularity of its single-premium whole life policy introduced last June.

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