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Jefferies (JEF) Q1 Earnings Beat Estimates on Lower Expenses

Jefferies Financial Group Inc.’s JEF first-quarter fiscal 2023 (ended Feb 28) adjusted earnings per share of 55 cents handily surpassed the Zacks Consensus Estimate of 48 cents. The bottom line, however, compared unfavorably with $1.24 earned in the prior-year quarter.

Results benefited from a decline in expenses and better-than-expected capital markets performance. However, lower revenues on dismal segment performance posed a headwind.

Results in the reported quarter excluded certain non-recurring items. After including those, net income attributable to shareholders was $133.6 million, down 59% year over year.

Revenues & Expenses Fall

Net revenues were $1.28 billion, down 24% year over year. However, the top line beat the Zacks Consensus Estimate of $1.13 billion.

Total non-interest expenses were $1.13 billion, down 13%. The fall was mainly due to lower compensation and benefits costs.

Segment Performance

Investment Banking and Capital Markets: Net revenues were $1.21 billion, down 17% from the prior-year quarter.

Asset Management: Net revenues were $78.3 million, which plunged 65% from the year-ago quarter.

Share Repurchase Update

During the fiscal first quarter, Jefferies repurchased 2.6 million shares for $98 million.

The company’s board of directors increased the share buyback authorization to a total of $250 million.

Our Take

Robust fixed income and equity trading business and lower expenses will support Jefferies’ financials. However, challenging market conditions for investment banking operations pose a concern.

Jefferies Financial Group Inc. Price, Consensus and EPS Surprise

Jefferies Financial Group Inc. Price, Consensus and EPS Surprise
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 #4 (Sell).

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Earnings Dates & Expectations of Other Banks

JPMorgan JPM is slated to report first-quarter 2023 results on Apr 14.

Over the past 30 days, the Zacks Consensus Estimate for JPMorgan’s quarterly earnings has moved marginally lower to $3.43. This indicates 30.4% growth from the prior-year quarter.

Bank of America BAC is scheduled to announce quarterly numbers on Apr 18.

Over the past 30 days, the Zacks Consensus Estimate for Bank of America’s quarterly earnings has moved 1.2% south to 81 cents, implying a 1.3% rise from the prior-year reported number.

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Bank of America Corporation (BAC) : Free Stock Analysis Report

JPMorgan Chase & Co. (JPM) : Free Stock Analysis Report

Jefferies Financial Group Inc. (JEF) : Free Stock Analysis Report

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