Jefferies Group Inc. Earnings Cheat Sheet: Revenues Fall, Bringing Down Profit

Jefferies Group Inc. (NYSE:JEF) posted a decrease in profit as revenue declined. Jefferies Group and its subsidiaries operate as independent, full-service global securities and investment banking firm serving companies and their investors.

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Jefferies Group Earnings Cheat Sheet for the Fourth Quarter

Results: Net income for Jefferies Group Inc. fell to $48.4 million (21 cents per share) vs. $62.7 million (31 cents per share) a year earlier. This is a decline of 23% from the year earlier quarter.

Revenue: Fell 18.5% to $554 million from the year earlier quarter.

Actual vs. Wall St. Expectations: JEF reported adjusted net income of 17 cents per share. By that measure, the company beat the mean estimate of 14 cents per share. It fell short of the average revenue estimate of $583.2 million.

Quoting Management: “We are proud of our 3,851 employee-partners who successfully navigated an extremely challenging fourth quarter that included continuing global volatility compounded by a November filled with a barrage of misinformation about Jefferies. Our firm responded by reducing our total balance sheet by nearly one quarter, decreasing our leverage to 9.9x from 12.9x, maintaining the already high quality of our inventory, and delivering solid profitability,”commented Richard B. Handler, Chairman and Chief Executive Officer of Jefferies.

Key Stats:

A year-over-year revenue decrease last quarter snaps a streak of four consecutive quarters of revenue increases. The best quarter in that span was the third quarter, which saw revenue rise 92.3%.

The company beat estimates last quarter after falling short in the previous two quarters. In the third quarter, it missed the mark by 13 cents, and in the second quarter, it fell short by 2 cents.

Net income has increased 1.1% year over year on average across the last five quarters. The biggest gain came in the third, when income climbed 47.6% from the year earlier quarter.

Looking Forward: Over the past ninety days, the average estimate for the first quarter of the next fiscal year has fallen from 41 cents per share to 33 cents, indicating that analysts are growing pessisimistic about the company’s performance next quarter. The average estimate for the fiscal year is $1.21 per share, down from $1.35 ninety days ago.

Competitors to Watch: Greenhill & Co., Inc. (NYSE:GHL), Piper Jaffray Companies (NYSE:PJC), Rodman & Renshaw Capital Group Inc. (NASDAQ:RODM), Goldman Sachs Group, Inc. (NYSE:GS), JMP Group Inc. (NYSE:JMP), Morgan Stanley (NYSE:MS), Evercore Partners Inc. (NYSE:EVR), Merriman Holdings Inc (NASDAQ:MERR), Bank of America (NYSE:BAC), J.P. Morgan (NYSE:JPM), Citigroup (NYSE:C) and KBW, Inc. (NYSE:KBW).

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(Company fundamentals provided by Xignite Financials. Earnings estimates provided by Zacks)