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Raymond James (RJF) Beats Q2 Earnings as Revenues Increase
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Raymond James Financial Inc. (RJF - Free Report) announced second-quarter fiscal 2017 (ended Mar 31) adjusted earnings per share of $1.28, which comfortably surpassed the Zacks Consensus Estimate of $1.11. Also, on a year-over-year basis, the bottom line surged 42%.
Better-than-expected results were primarily driven by an improvement in net revenue, reflecting improved investment banking and trading. Also, growth in assets acted as a tailwind. However, higher expenses owing to legal charges were on the downside.
After taking into consideration acquisition related charges, costs related to extinguishment of senior notes payable and Jay Peak settlement, net income totaled $112.8 million, down 10% from the year-ago quarter.
Revenues Improve, Costs Surge
Net revenue amounted to $1.56 billion, improving 19% year over year. The rise was attributable to an increase in all the revenue components while a rise in interest expenses hurt revenues marginally. Further, the reported figure beat the Zacks Consensus Estimate of $1.53 billion.
Segment-wise, for the reported quarter, RJ Bank recorded a net revenue increase of 13%. Further, Capital Markets witnessed net revenue growth of 8% while Asset Management and Private Client Group depicted top-line improvement of 20% and 23%, respectively. Also, Others reported a 17% improvement in the top line.
Non-interest expenses jumped 25% year over year to $1.40 billion. The rise was largely due to charges related to legal settlement.
As of Mar 31, 2017, client assets under administration increased 25% on a year-over-year basis to $642.7 billion while financial assets under management rose 24% to $85.6 billion.
Strong Balance Sheet & Ratios
As of Mar 31, 2017, Raymond James reported total assets of $32.9 billion, up 4% sequentially. Further, shareholders’ equity rose 2% on a sequential basis to $5.21 billion.
Book value per share was $36.28, up from $32.90 as of Mar 31, 2016.
As of Mar 31, 2017, total capital ratio came in at 22.6%, up from 21.9% as of Mar 31, 2016. Also, Tier 1 capital ratio was 21.7% compared with 20.9% in the year-ago period.
Also, adjusted return on equity (on an annualized basis) came in at 14.4% at the end of the reported quarter, up from 14.0% a year ago.
Our Take
Raymond James remains well positioned to grow via acquisitions, supported by a strong liquidity position. Further, loan growth coupled with improving economic environment will boost its top-line growth in the coming quarters.
Raymond James Financial, Inc. Price, Consensus and EPS Surprise
Interactive Brokers Group, Inc. (IBKR - Free Report) reported first-quarter 2017 adjusted earnings of 34 cents per share, which lagged the Zacks Consensus Estimate of 39 cents. Decrease in revenues, higher expenses as well as disappointing segment performance led to the lower-than-expected results. However, on the upside, the company recorded improvement in interest income and a rise in DARTs.
The Charles Schwab Corp.’s (SCHW - Free Report) first-quarter 2017 earnings of 39 cents per share outpaced the Zacks Consensus Estimate of 37 cents. Revenue growth, lower level of fee waivers and no provisions were among the positives. However, higher expenses and a decline in trading revenues remained the headwinds.
E*TRADE Financial Corporation reported first-quarter 2017 earnings of 48 cents per share, which easily surpassed the Zacks Consensus Estimate of 39 cents. Better-than-expected results reflected increased net revenue and a benefit to provision for loan losses. However, higher operating expenses were on the downside.
The Best & Worst of Zacks
Today you are invited to download the full, up-to-the-minute list of 220 Zacks Rank #1 "Strong Buys" free of charge. From 1988 through 2015 this list has averaged a stellar gain of +25% per year. Plus, you may download 220 Zacks Rank #5 "Strong Sells." Even though this list holds many stocks that seem to be solid, it has historically performed 6X worse than the market. See these critical buys and sells free >>
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Raymond James (RJF) Beats Q2 Earnings as Revenues Increase
Raymond James Financial Inc. (RJF - Free Report) announced second-quarter fiscal 2017 (ended Mar 31) adjusted earnings per share of $1.28, which comfortably surpassed the Zacks Consensus Estimate of $1.11. Also, on a year-over-year basis, the bottom line surged 42%.
Better-than-expected results were primarily driven by an improvement in net revenue, reflecting improved investment banking and trading. Also, growth in assets acted as a tailwind. However, higher expenses owing to legal charges were on the downside.
After taking into consideration acquisition related charges, costs related to extinguishment of senior notes payable and Jay Peak settlement, net income totaled $112.8 million, down 10% from the year-ago quarter.
Revenues Improve, Costs Surge
Net revenue amounted to $1.56 billion, improving 19% year over year. The rise was attributable to an increase in all the revenue components while a rise in interest expenses hurt revenues marginally. Further, the reported figure beat the Zacks Consensus Estimate of $1.53 billion.
Segment-wise, for the reported quarter, RJ Bank recorded a net revenue increase of 13%. Further, Capital Markets witnessed net revenue growth of 8% while Asset Management and Private Client Group depicted top-line improvement of 20% and 23%, respectively. Also, Others reported a 17% improvement in the top line.
Non-interest expenses jumped 25% year over year to $1.40 billion. The rise was largely due to charges related to legal settlement.
As of Mar 31, 2017, client assets under administration increased 25% on a year-over-year basis to $642.7 billion while financial assets under management rose 24% to $85.6 billion.
Strong Balance Sheet & Ratios
As of Mar 31, 2017, Raymond James reported total assets of $32.9 billion, up 4% sequentially. Further, shareholders’ equity rose 2% on a sequential basis to $5.21 billion.
Book value per share was $36.28, up from $32.90 as of Mar 31, 2016.
As of Mar 31, 2017, total capital ratio came in at 22.6%, up from 21.9% as of Mar 31, 2016. Also, Tier 1 capital ratio was 21.7% compared with 20.9% in the year-ago period.
Also, adjusted return on equity (on an annualized basis) came in at 14.4% at the end of the reported quarter, up from 14.0% a year ago.
Our Take
Raymond James remains well positioned to grow via acquisitions, supported by a strong liquidity position. Further, loan growth coupled with improving economic environment will boost its top-line growth in the coming quarters.
Raymond James Financial, Inc. Price, Consensus and EPS Surprise
Raymond James Financial, Inc. Price, Consensus and EPS Surprise | Raymond James Financial, Inc. Quote
Currently, Raymond James sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Performance of Other Investment Brokerage Firms
Interactive Brokers Group, Inc. (IBKR - Free Report) reported first-quarter 2017 adjusted earnings of 34 cents per share, which lagged the Zacks Consensus Estimate of 39 cents. Decrease in revenues, higher expenses as well as disappointing segment performance led to the lower-than-expected results. However, on the upside, the company recorded improvement in interest income and a rise in DARTs.
The Charles Schwab Corp.’s (SCHW - Free Report) first-quarter 2017 earnings of 39 cents per share outpaced the Zacks Consensus Estimate of 37 cents. Revenue growth, lower level of fee waivers and no provisions were among the positives. However, higher expenses and a decline in trading revenues remained the headwinds.
E*TRADE Financial Corporation reported first-quarter 2017 earnings of 48 cents per share, which easily surpassed the Zacks Consensus Estimate of 39 cents. Better-than-expected results reflected increased net revenue and a benefit to provision for loan losses. However, higher operating expenses were on the downside.
The Best & Worst of Zacks
Today you are invited to download the full, up-to-the-minute list of 220 Zacks Rank #1 "Strong Buys" free of charge. From 1988 through 2015 this list has averaged a stellar gain of +25% per year. Plus, you may download 220 Zacks Rank #5 "Strong Sells." Even though this list holds many stocks that seem to be solid, it has historically performed 6X worse than the market. See these critical buys and sells free >>