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Jefferies Posts 2Q Loss; Shares Rally
Shares of Jefferies were up 14% at $19.79 late in the trading session Tuesday.
July 22, 2008
Jefferies & Co. Tuesday posted a steep drop in its second-quarter results, though the middle-market bank's numbers looked much better than in the first quarter and were better than analysts' expectations.
Shares of Jefferies were up 14% at $19.79 late in the trading session Tuesday.
Jefferies lost $4.4 million, or 3 cents a share, in the second quarter, compared with earnings of $67.8 million, or 45 cents, for the same period a year ago. Second-quarter net revenues totaled $392 million, down from $465.5 million in the second quarter of 2007. Analysts were looking for a loss of about 16 cents a share.
The quarterly loss is the third consecutive posted by Jefferies, but it is a fraction of the $60.5 million loss posted by Jefferies in the first quarter and a $24.3 million loss posted in the fourth quarter of 2007.
The company said that commissions and principal transactions, trading revenues, were a record $244 million.
"In the face of a market environment that continues to be challenging, Jefferies achieved significantly improved results in the second quarter," Richard Handler, chairman and chief executive of the New York investment bank, said in a prepared statement.
When it comes to revenues by source, Jefferies posted gains in its equity-related activities--$149 million in the second quarter--eclipsing the second quarter of 2007 total of $144.6 million.
Revenues from fixed income and commodities--excluding high-yield--totaled $69.5 million and revenues from high-yield totaled $32 million. That $69.5 million is a record total for the firm's history and it was helped, in part, by the company's stepped up presence in mortgage-backed securities and investment grade bonds.
Investment banking revenue in the second quarter, totaling $109.4 million, was slightly higher from the first quarter's $99.3 million but off from the second quarter 2007 total of $223 million.
Asset management fees, meanwhile, dropped to $4.9 million from $7.3 million a year ago.
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