Shares of Jefferies Financial Group Inc. (JEF - Free Report) gained 4.4% in response to better-than-expected first-quarter fiscal 2022 (ended Feb 28) results. Adjusted earnings per share of $1.24 handily surpassed the Zacks Consensus Estimate of 92 cents. The bottom line also compared favorably with $1.14 earned in the prior-year quarter.
Results were hampered by lower revenues as segment performance was dismal. On the other hand, a decline in expenses was a tailwind.
Results in the reported quarter excluded certain non-recurring items. After including those, net income attributable to shareholders was $327.4 million, down 43.8% year over year.
Revenues & Expenses Fall
Net revenues were $1.73 billion, down 30.4% year over year. However, the top line beat the Zacks Consensus Estimate of $1.60 billion.
Total expenses were $1.31 billion, down 21.8%. The fall was mainly due to lower compensation and benefits costs and interest expense.
Segment Performance
Investment Banking and Capital Markets: Net revenues were $1.48 billion, down 25.4% from the prior-year quarter. Expenses totaled $1.06 billion, down 25.9%.
Asset Management: Net revenues were $60 million, which plunged 73.8% from the year-ago quarter. Expenses totaled $49.4 million, down 2.9%.
Merchant Banking: Net revenues were $189.5 million, falling 29% from the prior-year quarter. Expenses were $184 million, up 12%.
Corporate: Net revenues were $0.7 million, up 26.4% from the prior-year period. Expenses were $12.5 million, down 40.6%.
Share Repurchase Update
During the fiscal first quarter, Jefferies repurchased 10.04 million shares for $364.2 million.
The company’s board of directors increased the share buyback authorization to a total of $250 million.
Our Take
Steady decent underwriting and advisory businesses and lower expenses will support Jefferies’ financials. However, challenging market conditions for fixed income trading operations pose a concern.
Currently, Jefferies carries a Zacks Rank #4 (Sell).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Earnings Dates & Expectations of Other Banks
JPMorgan (JPM - Free Report) is slated to report fourth-quarter 2021 results on Apr 13.
Over the past 30 days, the Zacks Consensus Estimate for JPMorgan’s quarterly earnings has moved 1.1% lower to $2.76. This indicates a 38.7% decline from the prior-year quarter.
Bank of America (BAC - Free Report) is scheduled to announce quarterly numbers on Apr 18.
Over the past 30 days, the Zacks Consensus Estimate for Bank of America’s quarterly earnings has moved 1.3% south to 78 cents, implying a 9.3% fall from the prior-year reported number.
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Shares of Jefferies Financial Group Inc. (JEF - Free Report) gained 4.4% in response to better-than-expected first-quarter fiscal 2022 (ended Feb 28) results. Adjusted earnings per share of $1.24 handily surpassed the Zacks Consensus Estimate of 92 cents. The bottom line also compared favorably with $1.14 earned in the prior-year quarter.
Results were hampered by lower revenues as segment performance was dismal. On the other hand, a decline in expenses was a tailwind.
Results in the reported quarter excluded certain non-recurring items. After including those, net income attributable to shareholders was $327.4 million, down 43.8% year over year.
Revenues & Expenses Fall
Net revenues were $1.73 billion, down 30.4% year over year. However, the top line beat the Zacks Consensus Estimate of $1.60 billion.
Total expenses were $1.31 billion, down 21.8%. The fall was mainly due to lower compensation and benefits costs and interest expense.
Segment Performance
Investment Banking and Capital Markets: Net revenues were $1.48 billion, down 25.4% from the prior-year quarter. Expenses totaled $1.06 billion, down 25.9%.
Asset Management: Net revenues were $60 million, which plunged 73.8% from the year-ago quarter. Expenses totaled $49.4 million, down 2.9%.
Merchant Banking: Net revenues were $189.5 million, falling 29% from the prior-year quarter. Expenses were $184 million, up 12%.
Corporate: Net revenues were $0.7 million, up 26.4% from the prior-year period. Expenses were $12.5 million, down 40.6%.
Share Repurchase Update
During the fiscal first quarter, Jefferies repurchased 10.04 million shares for $364.2 million.
The company’s board of directors increased the share buyback authorization to a total of $250 million.
Our Take
Steady decent underwriting and advisory businesses and lower expenses will support Jefferies’ financials. However, challenging market conditions for fixed income trading operations pose a concern.
Currently, Jefferies carries a Zacks Rank #4 (Sell).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Earnings Dates & Expectations of Other Banks
JPMorgan (JPM - Free Report) is slated to report fourth-quarter 2021 results on Apr 13.
Over the past 30 days, the Zacks Consensus Estimate for JPMorgan’s quarterly earnings has moved 1.1% lower to $2.76. This indicates a 38.7% decline from the prior-year quarter.
Bank of America (BAC - Free Report) is scheduled to announce quarterly numbers on Apr 18.
Over the past 30 days, the Zacks Consensus Estimate for Bank of America’s quarterly earnings has moved 1.3% south to 78 cents, implying a 9.3% fall from the prior-year reported number.
Just Released: Zacks Top 10 Stocks for 2024
Hurry – you can still get in early on our 10 top tickers for 2024. Hand-picked by Zacks Director of Research, Sheraz Mian, this portfolio has been stunningly and consistently successful. From inception in 2012 through November, 2023, the Zacks Top 10 Stocks gained +974.1%, nearly TRIPLING the S&P 500’s +340.1%. Sheraz has combed through 4,400 companies covered by the Zacks Rank and handpicked the best 10 to buy and hold in 2024. You can still be among the first to see these just-released stocks with enormous potential.
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