Mr. James P. Hanbury

James P. Hanbury Add $57

First Union Securities N/A Buy $55

James P. Hanbury 212-903-2187

Goldman, Sachs & Co.

James P. Hanbury 212-903-2187

Goldman, Sachs & Co.

We think the top-line growth we expect to see will make up for those losses , says James P. Hanbury , analyst at Dresdner Kleinwort Wasserstein.

Most financial services firms reported poor earnings last quarter due to a slowdown in initial public offerings , trading activity and mergers and acquisitions.Citigroup ( nyse : C - news - people ) , with its insurance and consumer banking operations in addition to its trading and investment banking operations , is more immune to the market's downturns and should please Wall Street again.First Call/Thomson Financial's consensus earnings estimate on the firm is 73 cents per share , up from first-quarter earnings of 71 cents per share and 65 cents per share a year ago.

We think the top-line growth we expect to see will make up for those losses , says James P. Hanbury , analyst at Dresdner Kleinwort Wasserstein.

Most financial services firms reported poor earnings last quarter due to a slowdown in initial public offerings , trading activity and mergers and acquisitions.Citigroup ( nyse : C - news - people ) , with its insurance and consumer banking operations in addition to its trading and investment banking operations , is more immune to the market's downturns and should please Wall Street again.First Call/Thomson Financial's consensus earnings estimate on the firm is 73 cents per share , up from first-quarter earnings of 71 cents per share and 65 cents per share a year ago.

Certainly some of the company's 19 divisions will turn in weak results , but the advantage Citigroup has is its ability to offset losses with its other , stronger businesses.It's not that they aren't exposed to the slowing economy , says UBS Warburg analyst Daine Glossman.

Monday's upgrades were met by downgrades on Morgan Stanley and Goldman by Dresdner Kleinwort Wasserstein analyst James Hanbury.

Goldman's I-banking kin - Lehman Brothers , Bear Stearns , and Morgan Stanley - report earnings tomorrow.Merrill Lynch reports at the end of April.

Fed Shows It's Ready to Lend a Hand.

James Hanbury

They became very conscious of how they were employing capital , and they did a great job , recalled James Hanbury , an analyst with Dresdner Kleinwort Wasserstein.Look at Merrill's history , there's tons of fat to cut.Once they get the idea they've got to do it , they do it.O'Neal's going to do it..

Mr. Hanbury said he expected Merrill to announce that it would cut a large number of additional jobs , though he said he would be surprised if the number was as high as the 10 , 000 reported by The Wall Street Journal.That would amount to a reduction of more than 16 , 000 jobs , or almost one-fourth of Merrill's work force , in a year , he said.

Given the deteriorating outlook for Wall Street , Mr. Hanbury and other analysts had assumed that Merrill would abandon the ambitious profit- improvement goals it had set for itself.

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Mr. Hanbury said he expected Merrill's revenue to decline to about $22 billion this year from about $27 billion last year.Next year , he projects it will increase by only 3 percent or 4 percent.

While it is hard to figure exactly the profit Merrill makes in the over-the-counter market, decimalization did hurt second-quarter earnings, said Dresdner Kleinwort Wasserstein analyst Jim Hanbury.The company also failed to show strength on the fixed-income and equity trading side.

Other investment banks, such as Lehman Brothers Inc. and Bear Stearns Cos., with quarters that end a month before Merrill's, beat the street.Lehman cited "significant strength" in its capital markets activities coupled with record debt underwriting volumes, while Bear's fixed-income division more than made up for a decline in private client business.On Feb. 15, Bear Hunter Specialists LLC, Bear Stearns' joint venture with Hunter Parnters LLC, announced a $625.0M bid for New York Stock Exchange specialist Wagner Stott Mercator LLC.

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"Goldman said they wanted to get the commission instead of [pocketing] the spread," Hanbury said.

"It's real simple," he said."These people are very capable of figuring out what the return on capital is in a particular business.And if there isn't a return on capital, they're going to get out of the business.I think what they will do is adjust."

We think the top-line growth we expect to see will make up for those losses , says James P. Hanbury , analyst at Dresdner Kleinwort Wasserstein.

Most financial services firms reported poor earnings last quarter due to a slowdown in initial public offerings , trading activity and mergers and acquisitions.Citigroup , with its insurance and consumer banking operations in addition to its trading and investment banking operations , is more immune to the market's downturns and should please Wall Street again.First Call/Thomson Financial's consensus earnings estimate on the firm is 73 cents per share , up from first-quarter earnings of 71 cents per share and 65 cents per share a year ago.

Certainly some of the company's 19 divisions will turn in weak results , but the advantage Citigroup has is its ability to offset losses with its other , stronger businesses.It's not that they aren't exposed to the slowing economy , says UBS Warburg analyst Daine Glossman.