Earnings Reports for July 17

— -- Bank of America in Line With Estimates

Bank of America Corp. met Wall Street’sexpectations with second-quarter earnings of $1.23 pershare, up 7 percent over its operating earnings of $1.15 per sharea year ago.

With more than 4,500 branches in 21 states, Bank of Americaserves more than 30 million households and 2 million businesses.

Net income for the nation’s second-largest bank was $2.06billion, essentially unchanged from operating earnings a yearearlier. Net income in the same quarter last year was $1.92billion, or $1.07 per share, including a $145 million after-taxmerger-related charge.

Consumer and Commercial Banking, which serves individuals andbusinesses with annual sales of up to $500 million, earned $1.25billion and had a return on equity of 21 percent. This segmentrepresented 61 percent of the company’s net income.

Those gains were offset by slower capital markets activity anddepreciation in venture capital investments due to lower stockprices.

The return on common equity in the latest quarter was 17.63percent, basically unchanged from a year earlier, and the return onassets was 1.23 percent.

Mutual fund assets rose by $12 billion, or 14 percent, duringthe first six months of the year. In addition, the company agreedto acquire the remaining 50 percent of Marsico Capital ManagementLLC, an investment management firm which manages more than $15billion in assets.

Card revenue rose 13 percent and consumer investment andbrokerage revenue grew 16 percent. Trading revenue was up 19percent and corporate banking service revenue rose 9 percent.

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Corning Sees Earnings Soar

Corning Inc. reported second-quarter earnings were up 80 percent from a yearearlier, surpassing Wall Street expectations.

The company said growth was driven by strongsales of fiber optical cable and flat-panel display glass.

The company said second-quarter pro forma earnings reached$271.1 million, or 94 cents a share, compared with $136.5million, or 52 cents per share, in the same quarter of 1999.

Wall Street had expected Corning to earn 80 cents a share,according to research firm First Call/Thomson Financial.

The pro forma net income excludes amortization of purchasedintangibles and goodwill, in-process research and development,one-time acquisition costs, discontinued operations and othernonrecurring items.

The company boosted its outlook for full-year pro formaearnings to between $3.15 and $3.25 a share, about 60 percentabove the year-earlier $2 a share. Analysts have forecastearnings of $2.92 a share.

“This revised outlook reflects our very strong performancethis quarter and confidence for continued unprecedented demandfor Corning’s market-leading products through year-end,” said RogerAckerman, Corning’s chairman and chief executive officer.BACK TO TOP

Profits Improve at Delphi Automotive

Delphi Automotive Systems said that itssecond quarter earnings totaled $424 million, a 7.6 percentincrease over last year’s results.

The earnings of 75 cents per share matched Wall Streetexpectations, according to a survey by First Call/ThomsonFinancial. In the second quarter of 1999, Delphi earned $394million or 70 cents a share.

The world’s largest auto parts supplier said it had sales of$7.8 billion in the quarter, an increase of one percent over thesecond quarter of 1999. The former parts arm of General MotorsCorp. said sales to GM and its affiliates declined by $394 million,while sales to other customers increased $489 million.

The company said cost reductions were a major factor inimproving profits.

Its mobile multimedia division had revenues of $58 million, upfrom $8 million in the sames quarter last year. Delphi has set itssights on in-car technology as a growth business, and expects about$200 million in revenue from the division this year.

Delphi, based in the Detroit suburb of Troy, employs about216,000 workers in 39 countries.

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Global Banking Boosts FleetBoston

FleetBoston Financial said second-quarter net earnings increased 26 percent over the sameperiod last year, powered by a strong increase in its globalbanking and financial services business. “We had a strong quarter,” said FleetBoston spokesman JamesMahoney. “We experienced strong revenue growth and saw thecompletion of the bulk of the Fleet-BankBoston mergerconversions.”

FleetBoston reported net earnings of $847 million, or 91 centsper share, for the three-month period ending June 30, compared with$700 million, or 72 cents per share, in the same period last year.

Operating earnings rose 15 percent, to $772 million, or 83 centsper share, for the quarter, an increase from the $700 million, or72 cents per share, for the same period a year ago.

The 83 cents per share figure beat Wall Street expectations of82 cents per share.

Revenues for the period were $3.73 billion, slightly higher thanthe $3.45 billion the company reported for the quarter a year ago.That included $75 million after taxes for the sale of deposits andloans to Sovereign Bank, a requirement of the Fleet-BankBostonmerger.

Fleet has posted earnings of $1.58 billion for the first sixmonths of the year, compared with $1.38 billion in the first sixmonths of 1999.

That includes the expense of Fleet’s merger with BankBoston, andthe divestment of $3.6 billion worth of loans and $4 billion indeposits to meet government requirements for the merger.

The company said the growth of non-interest income, such asfees, as a percentage of overall income offset merger costs anddivestment in loans and deposits. That $2 billion in non-interestincome was 55 percent of total revenues in the second quarter.

Fleet saw strong growth in its global banking and financialservices sector. That part of the business reported second-quarterearnings of $460 million, 44 percent higher than a year ago.

The company also reported strong growth in its commercial andretail banking business, which saw earnings of $328 million, anincrease of 28 percent from the same period last year.

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Profits Up at Genentech

Biotechnology firm Genentech Inc. reported a 7 percent gain insecond-quarter profits, meeting Wall Street estimates, amidstronger sales of its cancer medicines.

The biotech bellwether said its income rose to $78.2million, or 29 cents a share, from $73.2 million, or 27 cents,in the year-ago quarter. Wall Street analysts had expected thecompany to earn 29 cents a share, according to FirstCall/Thomson Financial.

Revenues for the quarter rose 10 percent to $413.6 million,driven primarily by sales of breast cancer drug Herceptin andRituxan for non-Hodgkin’s lymphoma. Sales were also lifted bygains on the sale of certain marketable equity securities.

Second-quarter sales of Herceptin increased 44 percent to$66.7 million compared to $46.2 million in the second quarter of1999. Sales of Rituxan increased 38 percent to $102.8 millionfrom $74.4 million in the second quarter of 1999.

The quarterly profit increase was before the ongoing impactof the redemption of Genentech’s special common stock andrelated accounting treatment. As a result of theredemption-related charges, the company recorded a net loss forthe second quarter of $14.2 million, or a net loss per share of5 cents. The company recorded a net loss of $923.2 million or$3.59 per share for the second quarter of 1999.

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