Jefferies Profit Falls Sharply
18 September 2015 - 12:40AM
Dow Jones News
Jefferies Group LLC on Thursday said earnings in its third
quarter fell by almost half, the first indicator of how a recent
spate of volatility has whipsawed parts of Wall Street.
The New York securities firm attributed the weak results to a
disappointing trading environment for fixed-income, especially in
distressed debt and high-yield bonds.
"The third quarter's sales and trading environment was initially
slow due to concerns about a possible Greek exit from the Euro, and
then became more volatile and challenging in the second half of the
quarter as news of China's economic growth deceleration led to a
further deterioration of trading volumes and continuing declines in
global asset prices," the bank's CEO, Richard Handler, said in a
news release.
For the quarter ended Aug. 31, net income was $2.1 million
compared with $83.6 million a year earlier. Revenue was $578.9
million, down by nearly one-third from the $843.3 million it took
in the year-ago period.
Excluding impacts related to the company's exit from the Bache
commodities and financial derivatives unit, earnings declined 48%
to $46.8 million and revenue fell 27% to $583.2 million.
The investment firm lost money trading bonds during the quarter,
posting negative fixed income revenue of $18.2 million, compared
with year-earlier revenue of $195.3 million. Equities-trading
revenue rose 18% to $203.1 million.
Concerns over the growth of the Chinese and global economies
dragged down stock markets around the world in August. The Dow
Jones Industrial Average fell 6.6% in the month, the largest
percentage decline in over five years.
Fees from underwriting stocks and bonds fell 10% to $241
million, while fees from advising on deals dropped 25% to $148.8
million.
Write to Peter Rudegeair at peter.rudegeair@wsj.com
Subscribe to WSJ: http://online.wsj.com?mod=djnwires
(END) Dow Jones Newswires
September 17, 2015 10:25 ET (14:25 GMT)
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