Jefferies: Markets Stabilized in Latest Quarter

Jefferies Group LLC posted revenue and profit declines in its second quarter, but said markets largely stabilized from the first quarter.

The firm, a unit of Leucadia National Corp., reported a profit of $53.9 million during its fiscal second quarter, compared with a profit of $59.8 million a year earlier. Revenue fell 9% to $719.4 million.

"We are pleased to report quarterly results at a more normal level, reflecting better equity and fixed income secondary trading conditions, although new issue capital markets activity remained somewhat muted," Rich Handler, chairman and chief executive, and Brian Friedman, chairman of Jefferies's executive committee, wrote in a statement. "The trading environment was merely stable versus robust."

Jefferies is viewed by investors as a sneak-preview of results for the publicly traded banks, which report in the coming weeks.

Investment banking revenue fell 37% to $253 million as "continued slow" activity in new stock issuances and leveraged finance was partially offset by growth in advisory work.

Still, Jefferies said it was "particularly focused on continuing to expand our investment banking footprint in the U.S. and Europe, and are meeting and hiring talented individuals."

In the second quarter, total trading revenue increased 21% to $462 million as fixed-income revenue jumped 55%, while stock trading dropped 2%. Two equity block trades that were marked down during the first quarter by $82 million were marked back up during the second quarter by $60 million.

Jefferies said "virtually all" of its fixed income business lines across regions posted enhanced performance.

Write to Austen Hufford at [e-mail]

(END) Dow Jones Newswires

June 21, 2016 08:05 ET (12:05 GMT)

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