JEF Q2 Earnings Meet Estimates on Solid Capital Markets, Stock Down
Jefferies Financial Group 's JEF second-quarter fiscal 2025 (ended May 31) adjusted earnings of 43 cents per share matched the Zacks Consensus Estimate. The bottom line compared unfavorably with the prior-year quarter's earnings of 67 cents per share.
Results were aided by strong performance in higher capital markets revenues. However, weak performances in the investment banking (IB) and asset management business, alongside higher expenses, remain a spoilsport. The company's shares declined 2.5% in the after-market hours in light of these negatives.
Net income attributable to common shareholders (GAAP basis) was $88 million, declining from $145.7 million in the prior-year quarter.
Jefferies' Revenues Decline, Expenses Rise
Quarterly net revenues were $1.63 billion, down 1.3% year over year. The top line surpassed the Zacks Consensus Estimate of $1.56 billion.
Total non-interest expenses were $1.50 billion, up 5% from the prior-year quarter. The rise was due to an increase in almost all cost components except compensation and benefits and underwriting costs.
As of May 31, 2025, book value per common share was $49.96, up from $46.57 as of May 31, 2024. Further, adjusted tangible book value per fully diluted share of $32.84 increased from $31.27.
JEF's Quarterly Segment Performance
Investment Banking and Capital Markets: Net revenues were $1.47 billion, falling 1.6% from the prior-year quarter. The decline was due to lower equity & debt underwriting and fixed-income performance in capital markets, partially offset by solid performance across, along with a robust performance in Equities.
Asset Management: Net revenues were $154.6 million, down 1.2% from the year-ago quarter.
Jefferies' Dividend Update
Concurrently, Jefferies announced a quarterly cash dividend of 40 cents per share. The dividend will be paid out on Aug. 29, 2025, to shareholders as of Aug. 18.
Our View on JEF
Elevated expenses driven by higher compensation, alongside exposure to geopolitical risk, given its global presence, will likely hurt Jefferies' financials in the near term. Yet, a robust trading and asset management business, alongside improving IB operations, will offer support to some extent.
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 has a Zacks Rank #3 (Hold).
You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.
Earnings Dates of JEF's Peers
JPMorgan JPM is scheduled to report second-quarter 2025 results on July 15.
Over the past seven days, the Zacks Consensus Estimate for JPMorgan's quarterly earnings has been revised marginally upward to $4.47. This indicates 1.6% growth from the prior-year quarter. (Find the latest EPS estimates and surprises on Zacks Earnings Calendar.)
Bank of America BAC is slated to announce second-quarter 2025 results on July 14.
Over the past seven days, the Zacks Consensus Estimate for BAC's quarterly earnings has remained unchanged at 89 cents, implying a 7.2% rise from the prior-year quarter.
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