Evercore 2nd-Quarter Profit Climbs 19% On Higher Investment Banking Revenue

   By Brett Philbin 
 

Boutique advisory firm Evercore Partners Inc. (EVR) posted a 19% rise in second-quarter earnings as the company benefited from a string of deal closings despite a tough market environment.

Adjusted revenue in investment banking jumped 35% to $151.4 million from $111.8 million a year earlier. Year-to-date, Evercore has advised on notable transactions including Bristol-Myers Squibb Co.'s (BMY) $7 billion bid to buy Amylin Pharmaceuticals Inc. (AMLN) and InterDigital Inc.'s (IDCC) pending sale of $375 million in patent and patent applications to Intel Corp. (INTC).

Evercore's advisory business participated in 30 transactions that generated fees in excess of $1 million each, said Chief Executive Ralph Schlosstein in a statement. The performance was the firm's highest quarterly total to date and fueled the jump in investment banking revenue.

"Despite a quite challenging market environment, we are pleased with our results," Mr. Schlosstein said on a conference call with analysts.

Mr. Schlosstein said that he believed Evercore's "strong performance in revenue" in the first half of the year is sustainable for the remainder of the year if markets aren't terribly disrupted by the European debt crisis, adding that "our business today looks promising, but the rest of the world has clouds over it."

Evercore's results buck the quarterly trend in investment banking, where firms big and small have grappled with lackluster demand for mergers and acquisitions and other advisory services amid persistent concerns about Europe's debt woes and the strength of the global economy. Evercore is part of a group of independent advisers that includes Lazard Ltd. (LAZ) and Greenhill & Co. (GHL), which offer advisory services and don't lend or sell stocks, bonds or other financial products.

The structure eliminates conflicts of interest that can sometimes be present at bigger banks.

The results indicate Evercore is continuing to "grow and gain market share," Mr. Schlosstein said.

Evercore's adjusted net income from continuing operations--the figure that analysts typically use to evaluate the company--rose to $21.2 million, or 49 cents a share, up from $17.8 million, or 43 cents a share, a year ago.

Revenue climbed 23% to $172.1 million.

Analysts polled by Thomson Reuters had expected, on average, adjusted earnings of 48 cents on revenue of $163 million.

In a note to clients, JMP Securities analysts David Trone wrote that Evercore's "results likely alleviated concerns," particularly after Greenhill missed earnings expectations last week.

Shares of Evercore, which was founded by former Deputy U.S. Treasury Secretary Roger Altman, rose 1.5% Thursday to $21.27. The stock has fallen 20% year-to-date and 31% over the past 12 months.

Write to Brett Philbin at [e-mail]

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