Magazine article American Banker

Marshall & Ilsley Stock Gains despite Profit Slide

Magazine article American Banker

Marshall & Ilsley Stock Gains despite Profit Slide

Article excerpt

Shares of Marshall & Ilsley Corp. rose Thursday despite a drop in second-quarter profits.

The Milwaukee banking company reported earnings of 55 cents per share, down 28 cents from the same period last year.

It had prepared Wall Street with a warning June 22 that it would take $38.4 million in pretax nonrecurring charges off the balance sheet. The company said the charges were related to organizational changes and acquisitions at Metavante Corp., its processing subsidiary, as well as writedowns of auto lease residuals and final charges for charter consolidation.

Metavante acquired two technology companies in May, CyberBills and Derivion Corp., and Marshall & Ilsley received regulatory approval to purchase National City Bancorp. of Minneapolis. That deal is expected to be completed July 31.

M&I's second-quarter operating earnings were 91 cents a share, and analysts were pleased that operating profits came in at the upper end of what the company had told investors to expect.

Michael L Granger of J.P. Morgan Securities Inc. said that he was pleased with the revenue growth and does not expect further writedowns.

Jason Goldberg of Lehman Brothers Inc. agreed. After the June warning he told investors that any drop in Marshall & Ilsley's stock price related to the writedowns would provide a buying opportunity.

Instead, M&I has risen 8% since the warning, including a 3.03% rise Thursday, buoyed by increases in the broader market. …

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