Yahoo Finance Jefferies (JEF) Hits 52-Week High on Q2 Earnings Beat, IB Fees Up
Shares of Jefferies Financial Group JEF touched a 52-week high following the release of better-than-expected second-quarter fiscal 2024 (ended May 31) results as investment banking (IB) business rebounded. Adjusted earnings of 67 cents per share surpassed the Zacks Consensus Estimate of 63 cents. In the prior-year quarter, the company recorded adjusted earnings of 29 cents.
Results primarily benefited from an improvement in net revenues. The performance of the reportable segments was also strong. However, higher expenses hurt the results to some extent.
Net income attributable to common shareholders (GAAP basis) was $145.7 million, jumping significantly from $12.4 million in the prior-year quarter.
Revenues Improve, Expenses Rise
Net revenues were $1.66 billion, surging 60% year over year. The top line beat the Zacks Consensus Estimate of $1.56 billion.
Total non-interest expenses were $1.43 billion, up 40% from the prior-year quarter. The rise was due to an increase in all cost components except other expenses.
Quarterly Segmental Performance
Investment Banking and Capital Markets: Net revenues were $1.49 billion, jumping 41% from the prior-year quarter. The rise was driven by solid performance across advisory and equity and debt underwriting businesses, along with a robust performance in Equities and Fixed Income.
Asset Management: Net revenues were $156.5 million against the year-ago quarter’s negative revenues of $30.9 million.
Dividend Hike
Concurrently, Jefferies announced a quarterly cash dividend of 35 cents per share, marking a 16.7% hike from the prior payout. The dividend will be paid out on Aug 30 to shareholders as of Aug 19.
Our View
A solid trading business and resurgence in IB business are expected to support Jefferies’ financials. However, elevated expenses might hurt the bottom line to an extent in the near term.
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 carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Expected Earnings Dates of Other Firms
JPMorgan JPM is scheduled to report second-quarter 2024 results on Jul 12.
Over the past seven days, the Zacks Consensus Estimate for JPMorgan’s quarterly earnings has been revised marginally upward to $4.19. This indicates a 4.1% decline from the prior-year quarter.
Bank of America BAC is slated to announce second-quarter 2024 results on Jul 16.
Over the past seven days, the Zacks Consensus Estimate for Bank of America’s quarterly earnings has been unchanged at 79 cents, implying a 10.2% fall from the prior-year quarter reported number.
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