Jefferies Group Inc. (JEF:US), the New York- based brokerage that specializes in mid-sized companies, posted a $31.3 million loss in the third quarter as investment-banking revenue slumped.
The loss was 18 cents a share, compared with net income (JEF:US) of $38.8 million, or 26 cents, a year earlier. Revenue fell 18 percent to $274.6 million, the company said today in a statement. Jefferies was expected to lose 6 cents, the average estimate of 8 analysts (JEF:US) surveyed by Bloomberg. The loss includes 6 cents related to amounts owed Jefferies by Lehman Brothers Holdings Inc.
Jefferies posted its fourth consecutive quarterly loss as investment-banking revenue dropped 31 percent to $130.1 million. A 19 percent increase in commission revenue helped cushion the decline in investment banking.
Jefferies is poised to become the biggest independent securities firm. Larger rivals Goldman Sachs Group Inc. and Morgan Stanley transformed themselves into bank holding companies last month and St. Petersburg, Florida-based Raymond James Financial Inc. (RJF:US) announced plans to do the same.
Goldman and Morgan Stanley turned to the Federal Reserve after Lehman's collapse and Merrill Lynch & Co.'s decision to sell itself to Bank of America Corp. (BAC:US) The upheaval on Wall Street raised questions about the two firms' ability to survive without cheaper funding.
Jefferies rose 18 cents to $16.89 yesterday in New York Stock Exchange composite trading. The shares (JEF:US) have declined 27 percent this year.
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