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Jefferies (JEF) Stock Down on Q4 Earnings & Revenues Miss
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Shares of Jefferies Financial Group Inc. (JEF - Free Report) tanked 9.3% in response to lower-than-expected fourth-quarter fiscal 2021 (ended Nov 30) results. Adjusted earnings per share of $1.36 lagged the Zacks Consensus Estimate of $1.40. The bottom line, however, compared favorably with $1.11 earned in the prior-year quarter.
Results were hampered by a drop in revenues. While the Investment Banking and Capital Markets segment performance was impressive, Asset Management, Merchant Banking and Corporate disappointed. Meanwhile, a decline in expenses was a plus.
Results in the reported quarter excluded certain non-recurring items. After including those, net income attributable to shareholders was $324.9 million, up 5.7% year over year.
In fiscal 2021, adjusted earnings of $6.29 per share missed the consensus estimate of $6.34 but were up substantially year over year. Net income (GAAP basis) was $1.67 billion, up significantly from $769.6 million in fiscal 2020.
Revenues & Expenses Fall
Quarterly net revenues were $1.81 billion, down 2.7% year over year. Also, the top line missed the Zacks Consensus Estimate of $1.90 billion.
In fiscal 2021, net revenues increased 36.1% to $8.19 billion. However, the top line lagged the consensus estimate of $8.31 billion.
Total expenses for the quarter were $1.35 billion, down 5.7%. The fall was mainly due to lower compensation and benefits costs, interest expense and cost of sales.
Solid Quarterly Segment Performance
Investment Banking and Capital Markets: Net revenues were $1.61 billion, up 4.8% from the prior-year quarter. Expenses totaled $1.08 billion, down 7.5%.
Asset Management: Net revenues were $42.7 million, down 51.2% from the year-ago quarter. Expenses totaled $49.4 million, up 9.3%.
Merchant Banking: Net revenues were $152.7 million, falling 34% from the prior-year quarter. Expenses were $175.2 million, down 9.1%.
Corporate: Net revenues were $0.8 million, down 42.7% from the prior-year period. Expenses were $12.3 million, down 40.5%.
Share Repurchase Update
During the fiscal fourth quarter, Jefferies repurchased 2 million shares for $88 million.
The company’s board of directors increased the share buyback authorization by $88 million to a total of $250 million.
Dividend Hike
Concurrently, Jefferies announced a quarterly cash dividend of 30 cents per share, representing a 20% hike from the prior payout. The dividend will be paid out on Feb 25 to shareholders of record as on Feb 14.
Our Viewpoint
Steady improvement in underwriting and advisory businesses, and lower expenses will keep supporting Jefferies’ financials. However, challenging market conditions for fixed income trading operations are a concern.
Jefferies Financial Group Inc. Price, Consensus and EPS Surprise
JPMorgan (JPM - Free Report) is slated to report fourth-quarter 2021 results on Jan 14.
Over the past 30 days, the Zacks Consensus Estimate for JPMorgan’s quarterly earnings has moved 2.3% upward to $3.01. This indicates a 20.6% decline from the prior-year quarter.
Citigroup (C - Free Report) is scheduled to announce quarterly numbers on Jan 14.
Over the past 30 days, the Zacks Consensus Estimate for Citigroup’s quarterly earnings has moved 13.9% lower to $1.61, suggesting a 22.2% fall from the prior-year reported number.
Bank of America (BAC - Free Report) is scheduled to announce quarterly numbers on Jan 19.
Over the past 30 days, the Zacks Consensus Estimate for Bank of America’s quarterly earnings has moved 2.6% south to 96 cents, calling for a 28.8% jump from the prior-year reported number.
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Jefferies (JEF) Stock Down on Q4 Earnings & Revenues Miss
Shares of Jefferies Financial Group Inc. (JEF - Free Report) tanked 9.3% in response to lower-than-expected fourth-quarter fiscal 2021 (ended Nov 30) results. Adjusted earnings per share of $1.36 lagged the Zacks Consensus Estimate of $1.40. The bottom line, however, compared favorably with $1.11 earned in the prior-year quarter.
Results were hampered by a drop in revenues. While the Investment Banking and Capital Markets segment performance was impressive, Asset Management, Merchant Banking and Corporate disappointed. Meanwhile, a decline in expenses was a plus.
Results in the reported quarter excluded certain non-recurring items. After including those, net income attributable to shareholders was $324.9 million, up 5.7% year over year.
In fiscal 2021, adjusted earnings of $6.29 per share missed the consensus estimate of $6.34 but were up substantially year over year. Net income (GAAP basis) was $1.67 billion, up significantly from $769.6 million in fiscal 2020.
Revenues & Expenses Fall
Quarterly net revenues were $1.81 billion, down 2.7% year over year. Also, the top line missed the Zacks Consensus Estimate of $1.90 billion.
In fiscal 2021, net revenues increased 36.1% to $8.19 billion. However, the top line lagged the consensus estimate of $8.31 billion.
Total expenses for the quarter were $1.35 billion, down 5.7%. The fall was mainly due to lower compensation and benefits costs, interest expense and cost of sales.
Solid Quarterly Segment Performance
Investment Banking and Capital Markets: Net revenues were $1.61 billion, up 4.8% from the prior-year quarter. Expenses totaled $1.08 billion, down 7.5%.
Asset Management: Net revenues were $42.7 million, down 51.2% from the year-ago quarter. Expenses totaled $49.4 million, up 9.3%.
Merchant Banking: Net revenues were $152.7 million, falling 34% from the prior-year quarter. Expenses were $175.2 million, down 9.1%.
Corporate: Net revenues were $0.8 million, down 42.7% from the prior-year period. Expenses were $12.3 million, down 40.5%.
Share Repurchase Update
During the fiscal fourth quarter, Jefferies repurchased 2 million shares for $88 million.
The company’s board of directors increased the share buyback authorization by $88 million to a total of $250 million.
Dividend Hike
Concurrently, Jefferies announced a quarterly cash dividend of 30 cents per share, representing a 20% hike from the prior payout. The dividend will be paid out on Feb 25 to shareholders of record as on Feb 14.
Our Viewpoint
Steady improvement in underwriting and advisory businesses, and lower expenses will keep supporting Jefferies’ financials. However, challenging market conditions for fixed income trading operations are a concern.
Jefferies Financial Group Inc. Price, Consensus and EPS Surprise
Jefferies Financial Group Inc. price-consensus-eps-surprise-chart | Jefferies Financial Group Inc. Quote
Currently, Jefferies sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Earnings Dates & Expectations of Other Banks
JPMorgan (JPM - Free Report) is slated to report fourth-quarter 2021 results on Jan 14.
Over the past 30 days, the Zacks Consensus Estimate for JPMorgan’s quarterly earnings has moved 2.3% upward to $3.01. This indicates a 20.6% decline from the prior-year quarter.
Citigroup (C - Free Report) is scheduled to announce quarterly numbers on Jan 14.
Over the past 30 days, the Zacks Consensus Estimate for Citigroup’s quarterly earnings has moved 13.9% lower to $1.61, suggesting a 22.2% fall from the prior-year reported number.
Bank of America (BAC - Free Report) is scheduled to announce quarterly numbers on Jan 19.
Over the past 30 days, the Zacks Consensus Estimate for Bank of America’s quarterly earnings has moved 2.6% south to 96 cents, calling for a 28.8% jump from the prior-year reported number.