The second half of 2011 was a challenging time for Wall Street’s major investment firms. Europe’s sovereign debt crisis had markets in turmoil and many clients were sitting on their hands rather than making bets that could turn bad in a hurry.
Those conditions appear to have eased in early 2012, based on Tuesday’s first-quarter earnings report from Jefferies, which may be a harbinger of things to come for firms like Goldman Sachs Group, Morgan Stanley and others.
Jefferies reported first-quarter earnings that were down from a year ago to 33 cents per share, or $77 million, but still topped the consensus analyst estimate of 29 cents.
Investment banking revenue was up 20% to $286 million, and overall revenue climbed to $780 million, a modest climb from $758 million a year ago.
Perhaps most importantly, Jefferies showed a clear improvement from its fiscal fourth quarter, ended Nov. 30, 2011.
Investment banking revenue climbed to $285.8 million, from $261.3 million, while fixed income revenue jumped to $339.1 million, from $140.7 million in the November quarter.
Shares of Jefferies gained 2.9% to $19.63 Tuesday morning, up from just above $10 in mid-November.
“These solid results reflect our continued growth in investment banking and strong performance in fixed income,” said Chairman and Chief Executive Richard Handler, who drew praise in the fall for detailing and then slashing the firm’s European sovereign exposure in the wake of MF Global’s collapse. (See “Jefferies Bares All On European Debt Holdings.”)
Jefferies’ improved fixed income performance in the December-February period got a boost from a cooling off of the tension in Europe thanks to a second bailout package for Greece.
Markets-related businesses were a challenge for most financial firms in a rocky fourth quarter, but with equity markets in a mostly-unchallenged rally to start the year it is a safe bet that conditions will improve in the big bank reports that kick off in mid-April with JPMorgan Chase and Wells Fargo.
forbes.com
Those conditions appear to have eased in early 2012, based on Tuesday’s first-quarter earnings report from Jefferies, which may be a harbinger of things to come for firms like Goldman Sachs Group, Morgan Stanley and others.
Jefferies reported first-quarter earnings that were down from a year ago to 33 cents per share, or $77 million, but still topped the consensus analyst estimate of 29 cents.
Investment banking revenue was up 20% to $286 million, and overall revenue climbed to $780 million, a modest climb from $758 million a year ago.
Perhaps most importantly, Jefferies showed a clear improvement from its fiscal fourth quarter, ended Nov. 30, 2011.
Investment banking revenue climbed to $285.8 million, from $261.3 million, while fixed income revenue jumped to $339.1 million, from $140.7 million in the November quarter.
Shares of Jefferies gained 2.9% to $19.63 Tuesday morning, up from just above $10 in mid-November.
“These solid results reflect our continued growth in investment banking and strong performance in fixed income,” said Chairman and Chief Executive Richard Handler, who drew praise in the fall for detailing and then slashing the firm’s European sovereign exposure in the wake of MF Global’s collapse. (See “Jefferies Bares All On European Debt Holdings.”)
Jefferies’ improved fixed income performance in the December-February period got a boost from a cooling off of the tension in Europe thanks to a second bailout package for Greece.
Markets-related businesses were a challenge for most financial firms in a rocky fourth quarter, but with equity markets in a mostly-unchallenged rally to start the year it is a safe bet that conditions will improve in the big bank reports that kick off in mid-April with JPMorgan Chase and Wells Fargo.
forbes.com
No comments:
Post a Comment