New York Stock Exchange member firms saw flat first quarter profits, despite strong revenue gains.

NYSE firms that conduct business with the public reported first-quarter 2007 after-tax profits of US$3.03 billion and revenues of US$89.84 billion. This compared with US$3.08 billion in after-tax profits on revenues of US$77.56 billion in the first quarter of 2006. Profits exceeded US$4.9 billion in the prior quarter.

While revenues were up notably this year over last year’s first quarter, expenses rose too. In the first quarter, expenses came in at more than US$85 billion, up from US$72.8 billion in the same period last year.

Notably, the mix of profitable and unprofitable firms also shifted. In Q1 2007, the number of profitable firms slipped to 136 from 170; whereas the number of unprofitable firms rose to 63 from 46.

The NYSE member firms that conduct business with the public generally also includes firms that trade primarily for their own account, but excludes specialists. All firms are registered broker-dealers with the SEC. Revenues are predominantly derived from investment banking, trading, commissions and interest.