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New York, NY - Donaldson, Lufkin & Jenrette, Inc. (NYSE: DLJ) today reported second quarter net income
of $162.2 million, or $1.15 per diluted share, compared to the $165.7 million, or $1.14
per diluted share, reported for the second quarter of 1999. For the six-month period
ended June 30, 2000, DLJ's net income was a record $407.4 million, or $2.87 per diluted
share, 42 percent and 44 percent greater respectively than results for the comparable
six-month period in 1999.
DLJ's total revenues for the second quarter of 2000 were $2.4 billion, 31 percent
greater than the $1.8 billion in the second quarter of 1999. Second-quarter net revenues,
or total revenues minus interest expense, rose 9 percent to $1.6 billion. Return on
average common equity was 16.5 percent for the second quarter of 2000 and 21.3 percent
for the first six months of 2000. At June 30, 2000, book value per common share was
$30.50.
Mr. Joe L. Roby, President and Chief Executive Officer of Donaldson, Lufkin & Jenrette, Inc.,
said, "Given the industrywide weakness in new issue underwriting, particularly high-yield, we
are pleased with DLJ's second quarter results. This was the third strongest quarter ever in DLJ's
40-year history and it highlights both the diversity of our revenue sources and our ability
to serve clients' needs in even the most volatile market environments."
He continued, "DLJ's Financial Services Group led the firm in revenues and pretax profits
during the second quarter of this year and generated net revenues of $567.2 million. Thanks
to a strong performance by our Pershing Division, the group's pretax income increased
approximately 30 percent to $108.6 million. Within our Banking Group, DLJ's mergers and
acquisitions practice and our merchant banking and private equity businesses accounted
for the majority of the quarter's 55 percent rise in fee income to $514.8 million, which
more than offset the second quarter's 53 percent decline in underwriting income."
Second Quarter Highlights
Financial Services Group Pretax Up 30 Percent
Earning pretax income of $108.6 million, an increase of 30 percent over the comparable
quarter a year ago, DLJ's Financial Services Group - which represents DLJ's retail-related
businesses - led the firm in profitability for the second quarter of 2000. The group, which
consists of DLJ's Pershing correspondent clearing businesses, DLJ's 450-broker Investment
Services Group, its $30 billion Asset Management Group and its DLJdirect and iNautix
units, also saw its net revenues increase 30 percent in the second quarter of 2000 to
$567.2 million.
As of June 30, 2000, financial intermediaries around the world maintained more than
three million individual accounts aggregating nearly $416 billion at Pershing. Revenues
earned by DLJdirect, DLJ's online brokerage service, increased 40 percent to $84 million
for the second quarter of 2000. DLJdirect recorded a net loss of $6.6 million this
quarter, largely as a result of costs related to its international expansion.
M&A and Private Equity Fees Drive Banking Group
DLJ's Banking Group reported pretax income of $96.4 million for the second quarter of
2000. The Banking Group accounted for the majority of the $515 million of fee income
earned during the quarter and derived primarily from the firm's role in merger and
acquisition assignments. Fee income from these assignments increased 34 percent over
both the comparable quarter a year ago and the first quarter of 2000. Fee income
attributable to DLJ's role in raising private equity funds for independent fund
managers and acting as an agent in private equity placements almost doubled during
the second quarter.
Global Equities Group Pretax Doubles As European Business Expands
DLJ's Global Equities Group reported pretax income of $49.1 million during the quarter,
almost twice the $24.8 million reported for the comparable quarter a year ago.
A significant portion of this increase results from sharply increased revenues generated
by the firm's new international equities business.
Fixed Income Group Posts $30 Million Pretax
Pretax income generated by DLJ's Fixed Income Group declined to $30 million during
the second quarter of 2000, as higher interest rates impacted DLJ's high-yield and
other underwriting businesses and overall secondary trading revenues. Industrywide,
the volume of new issues of U.S. high-yield bonds fell to $8 billion in the second
quarter of 2000 from $31.4 billion during the second quarter of 1999 and $16.8 billion
during the first quarter of 2000. At June 30, 2000, DLJ had a 16 percent market share
as an underwriter of new U.S. issues of high-yield bonds and a 15 percent share of the
global high-yield underwriting market.
International Revenues Increase 39 Percent
As a direct result of DLJ's ongoing international expansion, revenues from non-U.S.
business activities increased by 39 percent year over year during the second quarter
to $312 million. The major contributors to this increase were DLJ's international
equities and international investment banking businesses.
Six-Month Summary
For the first six months of 2000, DLJ earned record net income of $407.4 million,
or $2.87 per diluted share, up 42 percent and 44 percent respectively from the comparable
six-month period in 1999.
Two of DLJ's four major business groups - Financial Services and Global Equities -
reported record pretax profits for the first six months of the year. DLJ's Financial
Services Group earned record pretax profits of $279 million, 60 percent higher than
during the first half of 1999, while DLJ's Global Equities Group saw its pretax income
nearly triple, rising to a record $143 million. DLJ's Banking Group enjoyed its second
best six-month performance as its pretax profits increased 23 percent to $251 million.
Total revenues for the first half of 2000 grew 47 percent to a record $4.9 billion and
net revenues rose 34 percent to $3.4 billion, as DLJ achieved record levels in most
revenue categories. Three of DLJ's four major business groups - Banking, Financial
Services and Global Equities - reported record net revenues for the first six months
of the year. Six-month net revenues generated by DLJ's international business activities
increased 91 percent to $697 million.
About Donaldson, Lufkin & Jenrette
Donaldson, Lufkin & Jenrette is a leading integrated
investment and merchant bank serving institutional, corporate, government and
individual clients. DLJ's businesses include securities underwriting; sales and
trading; investment and merchant banking; financial advisory services; investment
research; venture capital; correspondent brokerage services; online, interactive
brokerage services; and asset management. Founded in 1959 and headquartered in New
York City, DLJ employs approximately 11,300 people worldwide and maintains offices
in 13 cities in the United States and 16 cities in Europe, Latin America and Asia.
The company has two classes of common stock trading on the New York Stock Exchange.
Shares trading under the ticker symbol "DLJ" represent Donaldson, Lufkin & Jenrette,
Inc. Shares trading under the ticker symbol "DIR" track the performance of DLJdirect,
its online brokerage business. For more information on Donaldson, Lufkin & Jenrette,
refer to the company's World Wide Web site at http://www.DLJ.com.
The firm's world headquarters are located at 277 Park Avenue, New York, NY 10172;
telephone number 212-892-3000.
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