J.P. Morgan & Co. posted a weak second quarter, with profits down 19% as adverse market conditions took their toll, on trading and other revenue.

Meanwhile, Bank of New York's profits were up 49%, fueled by modest loan growth and improved interest-rate spreads, as the first New York money center banks reported earnings on Thursday.

Morgan's earnings were $350 million, down from $431 million in the second quarter of 1993.

That translated to per-share earnings of $1.73, which was lower than the analysts' consensus estimate of $1.81 compiled by First Call, an affiliate of Thomson Financial Services.

Trading Revenue Plunges

Morgan's trading revenue was down 56% to $228 million, from $520 million in the year-earlier quarter.

"Unfavorable market conditions affected Morgan's trading, investment securities, and the underwriting business," said Raphael Soifer, securities analyst at Brown Brothers Harriman. He said he would reduce earnings estimates for Morgan, but did not know by how much.

Morgan said its trading losses came in debt instruments, foreign exchange, and interest rate contracts, while revenue from trading equities and commodities rose during the quarter.

Total revenue was $1.466 billion, down 5% from $1.540 billion in last year's second quarter. Total net interest revenue was $540 million, up 21% from $424 million in last year's second quarter.

Underwriting Volume Off

Corporate-finance revenue fell 24% to $87 million, down from $115 million a year ago. Morgan attributed the drop to a market-wide decline in the volume of underwriting business.

Morgan's other revenue increased to $254 million, from $92 million a year ago, due largely to a one-time gain from the sale of a portion of the firm's investment in Columbia/HCA common stock.

At the same time, operating expenses rose 8% to $936 million in the quarter, partially because higher employee compensation resulted from a 6% staff increase last year.

Bank of New York's earnings were up 49% to $176 million, from $118 million in the year-earlier quarter, with revenue growth in processing and credit cards.

Estimate Is Exceeded

The bank's earnings per share of 87 cents were higher than analysts' estimate of 82 cents, as reported by First Call.

"This was the cleanest, easiest-to-understand quarter that Bank of New York has had in a long time," said Dennis Shea, securities analyst at Morgan Stanley. & Co.

Bank of New York's net interest income totaled $421 million, a 9% increase over the year-ago quarter. The bank's net interest-rate spread of 3.26% was 8 basis points higher than in the first quarter and 6 basis points higher than a year ago.

The spread and yield benefitted from the return of part of Bank of New York's $6.7 billion credit card portfolio to its balance sheet.

Mr. Shea said he had raised his per-share earnings estimate for Bank of New York in 1994 to $3.60 from $3.50, and for 1995 to $3.95 from $3.85. [TABULAR DATA OMITTED]

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