Jefferies Group 3Q net rises but shares sink
NEW YORK (AP) — Jefferies Group Inc. reported a 3 percent increase in earnings from its fiscal third quarter Thursday, but its shares sank because the gain resulted solely from its recent purchase of a stake in Knight Capital Group Inc.
The investment bank said net income for the three months ended Aug. 31 was $70 million, or 31 cents per share, up from $68 million, or 30 cents per share, a year earlier.
But earnings adjusted for the Knight Capital transaction were 24 cents a share. That was well below the consensus estimate of 30 cents per share by analysts surveyed by FactSet.
Revenue was $739 million, up 45 percent from $509 million, thanks partly to a boost from Knight Capital.
The Jefferies Group acquired a minority stake in the troubled brokerage on Aug. 6, providing a cash rescue along with other financial firms Blackstone, Getco, Stephens, Stifel Financial and TD Ameritrade.
Despite the quarterly earnings shortfall, Chairman and CEO Richard Handler said the company has just finished the best nine-month period in its 50-year history.
"Our equity base of $3.7 billion has never been more robust, and our balance sheet and liquidity have never been stronger," he said.
Jefferies shares fell $1.04, or nearly 7 percent, to $14.62 in afternoon trading.
The stock remains up nearly 20 percent since the Knight Capital transaction.