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Raymond James (RJF) Q4 Earnings Beat, Revenues & Costs Rise
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Raymond James’ (RJF - Free Report) fourth-quarter fiscal 2021 (ended Sep 30) adjusted earnings of $2.06 per share easily outpaced the Zacks Consensus Estimate of $1.75. The bottom line was up 73% from the prior-year quarter.
Results benefited from an impressive performance of the Capital Markets and Asset Management segments, which majorly drove revenue growth. A rise in assets balance, lower provisions, and a strong balance sheet position were the other tailwinds. However, higher operating expenses posed an undermining factor.
Net income (GAAP basis) was $429 million or $2.02 per share, up from $209 million or $1.00 per share in the prior-year quarter.
In fiscal 2021, adjusted earnings per share of $7.05 beat the consensus estimate of $6.75 and also surged 73% year over year. Net income (GAAP basis) was $1.4 billion or $6.63 per share, up from $818 million or $3.88 per share in the prior year.
Revenues & Costs Increase
Quarterly net revenues were $2.70 billion, increasing 30% year over year. The rise was driven by improvement in all revenue components. The top line also beat the Zacks Consensus Estimate of $2.51 billion.
In fiscal 2021, net revenues grew 22% to $9.76 billion. It also surpassed the Zacks Consensus Estimate of $9.6 billion.
Segment-wise, in the reported quarter, RJ Bank registered a rise of 9% from the prior year in net revenues. Also, both Private Client Group and Asset Management recorded 29% growth in revenues. Capital Markets’ top line surged 35% from the year-ago quarter. Others recorded negative revenues of $2 million compared with negative revenues of $20 million in the prior-year quarter.
Non-interest expenses increased 17% to $2.14 billion. The rise was mainly due to higher compensation, commissions and benefits, and business development charges and investment sub-advisory fees, which were partly offset by lower bank loan provision and other costs.
As of Sep 30, 2021, client assets under administration were $1.18 trillion, up 27% from the end of the prior-year quarter. Financial assets under management were $191.9 billion, up 25%.
Strong Balance Sheet & Capital Ratios
As of Sep 30, 2021, Raymond James reported total assets of $61.9 billion, up 8% sequentially. Total equity increased 5% from the fiscal third quarter to $8.2 billion.
Book value per share was $40.08, up from $34.72 as of Sep 30, 2020.
As of Sep 30, 2021, total capital ratio was 26.2% compared with 25.4% as of Sep 30, 2020. Tier 1 capital ratio was 25% compared with 24.2% as of September 2020-end.
Return on equity (annualized basis) was 21.3% at the end of the reported quarter compared with 11.9% a year ago.
Our Take
Raymond James’ global diversification efforts, strategic acquisitions, and strength in the investment banking business are expected to keep supporting top-line growth. However, continuously mounting operating expenses and lower interest rates remain near-term concerns.
Raymond James Financial, Inc. Price, Consensus and EPS Surprise
Performance & Earnings Date of Other Brokerage Firms
Charles Schwab’s (SCHW - Free Report) third-quarter 2021 adjusted earnings of 84 cents per share surpassed the Zacks Consensus Estimate of 80 cents. The bottom line jumped 65% from the prior-year quarter.
Interactive Brokers Group’s (IBKR - Free Report) third-quarter 2021 adjusted earnings per share of 78 cents surpassed the Zacks Consensus Estimate of 75 cents. The bottom line reflects growth of 47.2% from the prior-year quarter.
BGC Partners, Inc. is slated to announce quarterly numbers on Nov 3.
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Raymond James (RJF) Q4 Earnings Beat, Revenues & Costs Rise
Raymond James’ (RJF - Free Report) fourth-quarter fiscal 2021 (ended Sep 30) adjusted earnings of $2.06 per share easily outpaced the Zacks Consensus Estimate of $1.75. The bottom line was up 73% from the prior-year quarter.
Results benefited from an impressive performance of the Capital Markets and Asset Management segments, which majorly drove revenue growth. A rise in assets balance, lower provisions, and a strong balance sheet position were the other tailwinds. However, higher operating expenses posed an undermining factor.
Net income (GAAP basis) was $429 million or $2.02 per share, up from $209 million or $1.00 per share in the prior-year quarter.
In fiscal 2021, adjusted earnings per share of $7.05 beat the consensus estimate of $6.75 and also surged 73% year over year. Net income (GAAP basis) was $1.4 billion or $6.63 per share, up from $818 million or $3.88 per share in the prior year.
Revenues & Costs Increase
Quarterly net revenues were $2.70 billion, increasing 30% year over year. The rise was driven by improvement in all revenue components. The top line also beat the Zacks Consensus Estimate of $2.51 billion.
In fiscal 2021, net revenues grew 22% to $9.76 billion. It also surpassed the Zacks Consensus Estimate of $9.6 billion.
Segment-wise, in the reported quarter, RJ Bank registered a rise of 9% from the prior year in net revenues. Also, both Private Client Group and Asset Management recorded 29% growth in revenues. Capital Markets’ top line surged 35% from the year-ago quarter. Others recorded negative revenues of $2 million compared with negative revenues of $20 million in the prior-year quarter.
Non-interest expenses increased 17% to $2.14 billion. The rise was mainly due to higher compensation, commissions and benefits, and business development charges and investment sub-advisory fees, which were partly offset by lower bank loan provision and other costs.
As of Sep 30, 2021, client assets under administration were $1.18 trillion, up 27% from the end of the prior-year quarter. Financial assets under management were $191.9 billion, up 25%.
Strong Balance Sheet & Capital Ratios
As of Sep 30, 2021, Raymond James reported total assets of $61.9 billion, up 8% sequentially. Total equity increased 5% from the fiscal third quarter to $8.2 billion.
Book value per share was $40.08, up from $34.72 as of Sep 30, 2020.
As of Sep 30, 2021, total capital ratio was 26.2% compared with 25.4% as of Sep 30, 2020. Tier 1 capital ratio was 25% compared with 24.2% as of September 2020-end.
Return on equity (annualized basis) was 21.3% at the end of the reported quarter compared with 11.9% a year ago.
Our Take
Raymond James’ global diversification efforts, strategic acquisitions, and strength in the investment banking business are expected to keep supporting top-line growth. However, continuously mounting operating expenses and lower interest rates remain near-term concerns.
Raymond James Financial, Inc. Price, Consensus and EPS Surprise
Raymond James Financial, Inc. price-consensus-eps-surprise-chart | Raymond James Financial, Inc. Quote
Currently, Raymond James carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Performance & Earnings Date of Other Brokerage Firms
Charles Schwab’s (SCHW - Free Report) third-quarter 2021 adjusted earnings of 84 cents per share surpassed the Zacks Consensus Estimate of 80 cents. The bottom line jumped 65% from the prior-year quarter.
Interactive Brokers Group’s (IBKR - Free Report) third-quarter 2021 adjusted earnings per share of 78 cents surpassed the Zacks Consensus Estimate of 75 cents. The bottom line reflects growth of 47.2% from the prior-year quarter.
BGC Partners, Inc. is slated to announce quarterly numbers on Nov 3.