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Total Product Sales Rise 86% to $27 Billion
New York, NY - AXA Financial, Inc. (NYSE-AXF) today reported record operating results for
the first quarter ended March 31, 2000. For the quarter, after-tax operating earnings
applicable to common shares rose to $357.5 million, compared with $222.2 million reported
for the first quarter of 1999. Operating earnings per diluted share for the quarter increased
64% to $0.82, versus $0.50 for the year ago period. The overall return-on-equity (ROE) was
23.5% in the first quarter of 2000, up from 17.0% a year ago.
Total assets under management rose to a record $497 billion, up 36% or $131 billion,
above the level of a year ago. Net revenue growth was 46% to $3.1 billion compared to
last year's first quarter. Consolidated pre-tax margin before minority interest was 25.2%
in the first quarter of 2000 versus 22.7% in last year's first quarter, a 250 basis point
improvement. Total product sales of investment products, annuities, mutual funds and
life insurance were $26.7 billion, up 86% over the year ago quarter and 18% above the
previous record amount in the fourth quarter of 1999.
"AXA Financial turned in an excellent first quarter with record operating results,
driven by strong growth in net revenues along with considerable margin improvement."
said Edward D. Miller, President & CEO. "All of our operating divisions set new records
and we are excited by the progress in new initiatives that will enhance our future growth.
These initiatives are further broadening our already diverse revenue streams from which
we derive balance, stability, and growth as demonstrated again by this quarter's results.
"Through our team of talented people, broad distribution platforms, growing technological
capabilities, powerful brands and an expanding portfolio of services, we are armed with
a number of compelling strategic advantages to continue growing at strong rates,"
continued Mr. Miller. "We are clearly enjoying the benefits of these advantages and
will continue to pursue aggressively opportunities to leverage these advantages and
core strengths across the organization.
"To take advantage of the tremendous opportunities that the Internet represents for AXA
Financial, we assembled an E-swat team to develop a strategy to leverage existing
resources and advance our activities across the organization, " announced Mr. Miller.
"Through this process, we have developed a comprehensive plan to enhance customer
relationships and provide broader offerings via the Internet to both individual clients
and intermediaries, including brokers and banks," continued Mr. Miller.
Other significant accomplishments made in the first quarter of 2000 include:
AXA Financial
- Achieved pre-tax operating earnings before minority interest and other expenses
of a record $821 million, up 59% from 1999 and well ahead of our three-year compounded
growth rate of 33%
- Strengthened our brands through services that customers continue to embrace enthusiastically
along with effective advertising and positioning, with a concentration on Alliance, AXA Advisors
and DLJdirect
- Continued to buy back AXA Financial shares by purchasing 2 million shares in the quarter
Financial Advisory/Insurance
- Individual annuity sales were 26% ahead of last year's first quarter, totaling nearly $2.0 billion
- First-year life sales were $109 million, an increase of 30% over the year ago quarter
- Mutual fund sales were 51% ahead of last year's first quarter, reaching $1 billion
- AXA Asset Account (asset management account) attracted $608 million in client assets since
year-end 1999, totaling $1 billion in April of this year
- Began the rollout of fee-based Financial Planning to additional regions
- Expanded and enhanced Equitable Distributors, Inc.'s (Equitable's wholesaling distributor)
state-of-the-art Web site for use by intermediaries, including brokerage firms and banks
Investment Banking & Brokerage
- Ranked #1 in high yield in the world with a 19.2% market share
- Ranked #8 in European equity and equity related offerings, including convertibles
- International revenues rose 173% over the year ago quarter, reaching $385.3 million Financial
Services net revenues increased 66% above last year's first quarter, totaling $675.5 million
- Completed our largest sole managed IPO, which was the largest non-privatization IPO in Italian
history
- Provided leading-edge e-commerce technology through DLJdirect that garnered outstanding
recognition from the financial press including Barron's, Forbes "Best of the Web" - Spring 2000 issue,
and TheStreet.com's Online Readers' Survey 2000"
- DLJdirect's MarketSpeedTM 3.0 was awarded "E-Commerce Software - Best Product" and
"Online Brokerage Service - Best Product" by the Software & Information Industry Association at the
2000 Codie Awards
Investment Management
- Record mutual fund sales achieved with 115% growth over the prior year's first quarter with
over $25 billion of total mutual fund sales
- Non-U.S. mutual fund sales recorded an increase in gross sales of 159% versus the year ago period
- Net mutual fund assets grew 49% to $189 billion
- New institutional mandates totaled 42 accounts representing $2.3 billion in new assets
For the first quarter of 2000, AXA Financial's net income, which includes net
realized losses net of DAC and other charges was $298.6 million, or $0.64 per
diluted share, compared with $221.1 million, or $0.48 per diluted share reported in
the 1999 first quarter. The net realized losses net of DAC and other charges in the
first quarter of 2000 were $70.8 million versus $4.5 million of losses in the quarter
of a year ago.
Financial Advisory/Insurance Achieves Record Quarterly Results
First quarter operating earnings reached $158.2 million as compared with $128.1 million
reported in the year ago quarter, reflecting a 24% increase. Net revenue growth in the
quarter was 16% and pre-tax margins improved by 260 basis points to 40.5% from 37.9% a
year ago. First quarter 2000 insurance ROE improved to 16.5% from 14.5% last year.
"For the first quarter of 2000, operating earnings reached our best-ever quarterly
levels," said Michael Hegarty, Senior Vice Chairman and Chief Operating Officer.
"Total sales of life insurance, annuity and mutual fund products grew to $3.9 billion
for the quarter, 26% above the quarter of a year ago and the highest level ever.
These sales were driven by 23% growth in annuities, 51% expansion in mutual funds, and 30%
growth in first year life sales. In addition, Equitable Distributors, Inc., our wholesale
distribution arm, turned in an excellent performance for the quarter with sales up 70%
above last year's comparable quarter to $701 million. We are particularly pleased with
the market acceptance of our variable life product, which became available across the
country at the beginning of 2000.
"Another highlight of the quarter was the continuing success of our AXA Asset
Account (asset management account), which is part of our fee-based financial planning
effort," Mr. Hegarty continued. "At quarter end, we had 6,485 funded accounts and
$846 million in client assets, up from 1,881 accounts and $238 million in client assets at
year-end 1999. During the first quarter, we attracted $608 million of net new client
assets with total client assets exceeding $1 billion in April of this year. This
milestone was achieved ahead of our expectations. Moreover, we are excited about the
opportunity that the AXA Asset Account represents for our clients and how this product
should contribute to future growth and longer customer relationships. "In addition, our
fee-based financial planning advanced even further in the latest quarter as we began our
national rollout in Florida-Caribbean, Western and Southern regions, some of the nation's
most lucrative consumer markets. Early results from this rollout have been promising.
We expect full national rollout of fee-based planning by fall of 2000,"
added Mr. Hegarty.
Investment Banking & Brokerage Reaches New Records
At March 31, 2000, DLJ's net income reached $245.2 million, or $1.72 per diluted share,
more than double the level reached in the year ago quarter of $121.7 million, or $0.84 per
diluted share. Net revenues grew 66% to $1.9 billion. Pre-tax margins improved by 337 basis
points. Reported return on equity for the latest period was 26.4%.
DLJ's contribution to AXA Financial's results were at record levels in the first quarter
of 2000 with $160.9 million versus $78.5 million in the first quarter of 1999.
"DLJ produced its best quarterly earnings in its 40-year history, and actually produced 41%
of last year's record earnings total in this year's opening period," commented Mr.
Miller. "These record revenues and profits underscore DLJ's important franchises in
both domestic and international markets which add balance and diversity to the business
mix and consistency to its performance. All of DLJ's major business units had operating
results well ahead of last year's first quarter as we continued to expand growth and
reach new levels of profitability in the financial services, equities and banking
areas, in particular.
"DLJ's Financial Services Group, including Pershing's correspondent clearing business,
online and traditional brokerages, and asset management business, was the leading
contributor to DLJ's earnings in first quarter. This group produced net revenues of
$675.5 million in the first quarter, reflecting a 66% year-over-year increase and earned
pretax profits of $171 million, 88% ahead of the comparable period of last year.
"DLJ's Global Institutional Equities Group achieved impressive quarterly results, with
net revenues doubling to $450 million and pretax profits increasing nearly threefold to
$94.1 million from the year ago period.
"DLJ's Banking Group generated revenues of $548 million during the first quarter
of 2000, representing a year-over-year increase of 70%, and fee income in M&A was
robust. The group's pretax profits nearly doubled, rising to $154 million.
"Despite some softness in the fixed income markets (accounting for 13% of DLJ's total
revenues) during the quarter, DLJ continued to lead the industry in high-yield
underwriting.
"Net revenues in non-U.S. businesses almost tripled to $385 million during the first
quarter of 2000. And, this is from a business that has only been in existence for about
two years. While DLJ's international businesses were not profitable in the aggregate,
important strides toward profitability were made in the first quarter. DLJ's new
international equity business achieved profitability after only five quarters of
operations," continued Mr. Miller.
DLJdirect's Revenues Soar 142% in Latest Quarter
DLJdirect, DLJ's online brokerage service, posted record revenues of $114.7 million for
the first quarter of 2000, reflecting a 142% increase over the year ago quarter of
$47.4 million. Net income totaled $13.6 million, or $0.13 per diluted share - up 90%,
from the $7.2 million, or $0.07 per share (pro-forma), reported in 1999's first quarter.
"DLJdirect continued to expand on all fronts in the first quarter of this year,"
said Mr. Miller. "Commissions grew by 133% above the year-ago quarter to $74.5 million
and rose 68% from the fourth quarter of 1999. Equally impressive was the increase in trades
executed in the quarter which reached 2.8 million in the U.S. - up one million from the
fourth quarter of 1999.
"Building on the success of its online brokerage operations in the U.S., U.K. and
Japan, DLJdirect continued to aggressively expand across the globe. During the first
quarter, the company announced plans to extend its offerings to countries in Asia and
14 nations in the Middle East and North Africa. This represents exciting growth
opportunities in expanding global markets. In the latest quarter, 12% of DLJdirect's
trades were represented by international activities and with our expansion plans, we expect this
number to grow appreciably. In addition, we are leveraging the progress made by DLJ and iNautix
across other parts of the organization - such as our joint e-commerce initiative -- that
is serving as the foundation for AXA Financial's e-commerce launch and shaving considerable time
and dollars off the development of these new initiatives." continued Mr. Miller.
Investment Management also Reports Records
Alliance Capital Management reported net income of $171.2 million in the latest quarter,
up 75% from the 1999 first quarter. Powered by strong sales in mutual funds, net revenues
grew 31% to $548.4 million. Total assets under management reached a record $394.2 billion,
up 31% or $93 billion over the level of a year ago. For the latest quarter, mutual fund
sales reached record levels, totaling more than $25 billion and representing growth of 115%
over the year ago quarter.
Alliance Capital's contribution to AXA Financial's first quarter 2000 income was a record
$55.2 million, versus $24.3 million in the first quarter of 1999.
"Alliance Capital produced yet again, another terrific quarter," stated Mr. Miller.
"Driven by diverse investment offerings, exceptional investment performance, robust
net sales growth in mutual funds, market share gains and new institutional accounts,
Alliance remains one of a handful of fund companies that are gathering a significant
portion of the industry's new assets. This expanding scale contributes significantly
to revenue growth and improving cost efficiencies."
About AXA Financial
AXA Financial, Inc., with approximately $500 billion in assets under management, is one of
the world's premier financial services organizations through its family of strong, well
recognized brands: The Equitable Life Assurance Society, AXA Advisors, Donaldson, Lufkin
& Jenrette (DLJ), DLJdirect, Pershing, iNautix and Alliance Capital Management. AXA
Financial is a member of the global AXA Group, which has operations in over 60 countries
and has more than $700 billion in assets under management.
For more information about AXA Financial, visit our Website at http://www.axa-financial.com.
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