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Third-Quarter Net Earnings of $3.17 Per Diluted Share; EPS of $2.00 Excluding Net Merger Gain, Up 43 Percent From 2005

Authorizes an Additional $5 Billion in Stock Buybacks


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NEW YORK, October 17, 2006 — Merrill Lynch (NYSE: MER) today reported record net earnings and earnings per diluted share for both the third quarter and first nine months of 2006, as net revenues increased over the prior-year periods in all
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Net earnings for the third quarter of 2006 were $3.0 billion, or $3.17 per diluted share, as total net revenues increased significantly from both the third quarter of 2005 and the second quarter of 2006, to $9.9 billion. The annualized return on common equity for the quarter was 35.3 percent. Those figures all include significant net benefits from the closing of the merger between Merrill Lynch Investment Managers (MLIM) and BlackRock (NYSE:
The net impact from closing the BlackRock merger included a one-time pretax gain of $2.0 billion and related non-interest expenses of $202 million, for a total after-tax net benefit of $1.1 billion, or $1.17 per diluted share. Excluding the net benefits from the BlackRock merger, third-quarter 2006 net earnings were $1.9 billion, and net earnings per diluted share of $2.00 were higher than any previous quarter for Merrill Lynch and up 43 percent from the 2005 third quarter and up 23 percent from the 2006 second quarter. Third-quarter net earnings and earnings per share included a tax benefit which reduced the effective tax rate. Adjusted to exclude the net benefits from the merger, pretax earnings of $2.4 billion were higher than in any previous quarter, up 22 percent from the
Merrill Lynch may also, from time to time, disclose financial information on a non-GAAP basis where management believes this information will be valuable to investors in gauging the quality of Merrill Lynch's financial performance and identifying trends.

Contact Media Relations:
Jessica Oppenheim 212.449.
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Jonathan Blum 866.607.
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