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Moelis & Company (MC) Stock Slips 2% on Q3 Loss, Revenues Up
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Shares of Moelis & Company (MC - Free Report) dipped 2% in after-hours trading after reporting a third-quarter 2023 loss. The company incurred an adjusted loss per share of 15 cents against the Zacks Consensus Estimate for earnings of 5 cents. The bottom line also compared unfavorably with earnings of 37 cents in the prior-year quarter.
Results were adversely impacted by a surge in expenses. However, an improvement in revenues and a solid liquidity position were the positives.
Net loss (GAAP basis) was $11.4 million or 16 cents per share against a net income of $28.6 million or 37 cents per share.
Revenues Jump, Expenses Rise
Total revenues (GAAP basis) grew 17% year over year to $272.2 million. The rise was driven by an increase in fees earned from restructuring and capital markets transactions. The top line also beat the Zacks Consensus Estimate of $243.2 million.
Total operating expenses (GAAP basis) were $292.2 million, up 47%. The rise was due to an increase in both compensation and benefits costs and non-compensation expenses. Our estimates for total operating expenses were $181 million.
Other income (GAAP basis) was $9.9 million in the reported quarter compared with $2.6 million in the prior-year quarter.
As of Sep 30, 2023, the company had cash and liquid investments of $297.8 million, with no debt or goodwill.
Our View
Moelis & Company’s global expansion initiatives and diverse operations across sectors and industries bode well. However, heightened geopolitical and macroeconomic uncertainties will continue to adversely impact the company’s financials.
Moelis & Company Price, Consensus and EPS Surprise
Raymond James’ (RJF - Free Report) fourth-quarter fiscal 2023 (ended Sep 30) adjusted earnings of $2.13 per share missed the Zacks Consensus Estimate of $2.28. The bottom line, however, was up 2% from the prior-year quarter.
A muted investment banking (IB) performance hurt the Capital Markets segment’s results. Also, RJF recorded bank loan provision for credit losses during the quarter on the deteriorating macroeconomic outlook. Further, expenses increased during the quarter.
Yet, higher interest rates and a rise in loan demand acted as tailwinds, which led to a substantial jump in net interest income (NII). The performance of the Private Client Group was robust. The acquisitions over the past years supported the company’s financials to some extent.
Jefferies Financial Group Inc.’s (JEF - Free Report) third-quarter fiscal 2023 (ended Aug 31) adjusted earnings per share of 32 cents lagged the Zacks Consensus Estimate of 34 cents. The bottom line also compared unfavorably with $1.10 earned in the prior-year quarter.
JEF’s results were adversely impacted by lower revenues on dismal asset management and advisory businesses. However, a decline in expenses and better-than-expected capital markets performance acted as tailwinds.
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Moelis & Company (MC) Stock Slips 2% on Q3 Loss, Revenues Up
Shares of Moelis & Company (MC - Free Report) dipped 2% in after-hours trading after reporting a third-quarter 2023 loss. The company incurred an adjusted loss per share of 15 cents against the Zacks Consensus Estimate for earnings of 5 cents. The bottom line also compared unfavorably with earnings of 37 cents in the prior-year quarter.
Results were adversely impacted by a surge in expenses. However, an improvement in revenues and a solid liquidity position were the positives.
Net loss (GAAP basis) was $11.4 million or 16 cents per share against a net income of $28.6 million or 37 cents per share.
Revenues Jump, Expenses Rise
Total revenues (GAAP basis) grew 17% year over year to $272.2 million. The rise was driven by an increase in fees earned from restructuring and capital markets transactions. The top line also beat the Zacks Consensus Estimate of $243.2 million.
Total operating expenses (GAAP basis) were $292.2 million, up 47%. The rise was due to an increase in both compensation and benefits costs and non-compensation expenses. Our estimates for total operating expenses were $181 million.
Other income (GAAP basis) was $9.9 million in the reported quarter compared with $2.6 million in the prior-year quarter.
As of Sep 30, 2023, the company had cash and liquid investments of $297.8 million, with no debt or goodwill.
Our View
Moelis & Company’s global expansion initiatives and diverse operations across sectors and industries bode well. However, heightened geopolitical and macroeconomic uncertainties will continue to adversely impact the company’s financials.
Moelis & Company Price, Consensus and EPS Surprise
Moelis & Company price-consensus-eps-surprise-chart | Moelis & Company Quote
Currently, Moelis & Company has a Zacks Rank #5 (Strong Sell).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Performance of Other Investment Banks
Raymond James’ (RJF - Free Report) fourth-quarter fiscal 2023 (ended Sep 30) adjusted earnings of $2.13 per share missed the Zacks Consensus Estimate of $2.28. The bottom line, however, was up 2% from the prior-year quarter.
A muted investment banking (IB) performance hurt the Capital Markets segment’s results. Also, RJF recorded bank loan provision for credit losses during the quarter on the deteriorating macroeconomic outlook. Further, expenses increased during the quarter.
Yet, higher interest rates and a rise in loan demand acted as tailwinds, which led to a substantial jump in net interest income (NII). The performance of the Private Client Group was robust. The acquisitions over the past years supported the company’s financials to some extent.
Jefferies Financial Group Inc.’s (JEF - Free Report) third-quarter fiscal 2023 (ended Aug 31) adjusted earnings per share of 32 cents lagged the Zacks Consensus Estimate of 34 cents. The bottom line also compared unfavorably with $1.10 earned in the prior-year quarter.
JEF’s results were adversely impacted by lower revenues on dismal asset management and advisory businesses. However, a decline in expenses and better-than-expected capital markets performance acted as tailwinds.