Jefferies Group Inc. (JEF) Reports $77 Million for Q1: Down 11% Q-Q – ValueWalk Premium

Jefferies Group Inc. (JEF) Reports $77 Million for Q1: Down 11% Q-Q



On Tuesday, Jefferies Group Inc. (NYSE:JEF)reported its first quarter earnings report and noted a profit of $77 million. This came as the company’s debt trading and investment banking saw some life again after a lackluster second half in 2011.

Jefferies saw its revenue more than double to $339.1 million from debt trading in the first quarter as compared to the fourth quarter.  Investment banking reported a 9.4 percent rise to $285.8 million from the previous quarter and the company saw its net revenue for the quarter increase to $780 million from the previous year.

On the downside, Jefferies’s quarterly profit did drop 11 percent as compared to 2011’s first quarter. It also reported that asset-management fees tanked 77 percent to $5.6 million when looking at the same time period in 2011. This division represents a small percentage of the company’s overall revenue.

In a statement by Richard B. Handler, the firm’s chairman and chief executive, he said, “These solid results reflect our continued growth in investment banking and strong performance in fixed income.”

The Street had been concerned about numbers after the recent MF Global implosion and its exposure to European sovereign debt in the fourth quarter. Jefferies responded to investors’ fears of a potential firm collapse and slashed its European exposure by approximately 75 percent last quarter, according to MarketWatch.

Jefferies represented the first U.S. investment bank to announce its first quarter numbers and the company is seen a “barometer” for future results from rivals including Goldman Sachs Group Inc. (NYSE:GS) and Morgan Stanley (NYSE:MS), the two largest investment banks in the country.

The market responded positively to the earnings report and Jefferies is up 2.47 percent to $19.53 at the time of this writing. Both Morgan Stanley and Goldman Sachs Group Inc. are up over 2.5% on the news as well.



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