Banking technology stocks stabilized at the end of last week in the wake of one of the most volatile market swings in years.
Indications from Federal Reserve Chairman Alan Greenspan that interest rate rises are not imminent, coupled with corporate earning reports that were not as dreadful as the market expected, helped the market recover from its losses early in the week.
The Dow Jones Industrial Average for the week was down nearly 84 points, to 5,426.82, while the Nasdaq composite was down less than 6 points to 1,097.6 late Friday.
F. Mark D'Annolfo, analyst at Adams, Harkness, & Hill Inc. in Boston, was bullish on several financial-related companies, claiming the recent woes for certain "product-oriented" technology providers were actually good news for those in the services business.
"Technology took the biggest hit" in the market, he said, but many financial service companies "held up substantially better."
Several bank technology firms released favorable earnings for the second quarter.
BHC Financial Inc., a Philadelphia-based company that does processing for bank brokerage affiliates, reported record net income of nearly $5 million, or 75 cents a share. It clearly exceeded the Wall Street consensus estimate of 55 cents, as published by IBES International Inc.
William T. Spane Jr., BHC chairman, president, and chief executive officer, said the company's record earnings resulted from "being in the right place at the right time."
He said he was encouraged by the increase in commission revenues and "growth we see in business from clients added late last year."
Last week, BHC Financial's stock gained $0.625 to $13.875 as of late Friday.
Diebold Inc., the North Canton, Ohio-based automated teller manufacturer, also weighed in with a strong $24.5 million of net income, an increase of 29% from the year-earlier quarter. Earnings per share, at 53 cents, surpassed analysts' consensus by four cents.
"Diebold's strategy to increase penetration in global markets paid off in the second quarter," said Robert W. Mahoney, president and CEO.
Its stock was up $4.375 for the week, trading at $48.125 late Friday.
American Management Systems Inc., Fairfax, Va., earned $8.3 million for the quarter, up 26%.
At 20 cents per share, the earnings hit the Wall Street consensus target. The stock price was $27.125 late Friday, down slightly from the previous week's close of $27.25.
Equifax Inc., at $41 million of net income and 28 cents a share, beat Wall Street's estimate by a penny.
SPS Transaction Services Inc. fell three cents short of the earnings expectation of 24 cents a share. Riverwoods, an Ill.-based credit card processor, had net income of 6.6 million for the quarter, down 33% as a result of chargeoffs in its private-label card portfolio.