Results for NASD-reporting firms in 1Q’06 were impressive, showing a powerful start to this year. Profits for these firms were $3.1 billion in 1Q’06, a jump of 62.0% over the immediately preceding quarter and 73.8% above the same year-earlier period, and the best quarterly result in more than five years.
“For NASD-reporting firms, the first quarter of 2006 was exceptionally strong -- the best quarterly result in five years,” said Frank Fernandez, SIA’s chief economist. “Although final figures for NYSE-reporting firms for the same period have not yet been released, it is clear based on public filings (10Qs) that the securities industry is off to a strong start in 2006 and prospects for industry performance this year looks promising.”
For the full year 2005, securities industry profits were $17.6 billion, 15.2% below the $20.7 billion earned in 2004, but still the fifth highest on record. Industry profits combine the results for NYSE-reporting firms and NASD-reporting firms to find the total for all firms doing a public business in the US. NASD-reporting firms alone earned $8.1 billion in profits in 2005, a 15.5% increase above the $7.0 billion recorded in 2004, but still below the record results of $10.6 billion in 2000.
$1.9 billion of the NASD firm’s 2005 profits came in the fourth quarter, a 13.9% drop from the previous quarter. Adding these 4Q’05 numbers to the New York Stock Exchange-member firms’ earlier report shows the industry’s profits as a whole were $4.2 billion in 4Q’05, down 16.1% from the prior quarter.
Also of interest from SIA this month is the “Securities Industry Employment and Compensation Trends” which summarizes some of the findings presented in the May issue of Securities Industry Trends, and offers an analysis of the occupational distribution and demographic characteristics of headcount and compensation, as well as the drivers of these employment trends.