Piper Jaffray Earnings: Here’s Why Investors Are Bidding Shares Up

Piper Jaffray Companies (NYSE:PJC) delivered a profit and beat Wall Street’s expectations, AND beat the revenue expectation. The revenue beat is a positive sign to shareholders seeking high growth out of the company. Shares are up 2.87%.

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Piper Jaffray Companies Earnings Cheat Sheet

Results: Net income increased to $15.6 million (88 cents per diluted share) in the quarter versus a net loss of $116.36 million in the year-earlier quarter.

Revenue: Rose 32.86% to $140.9 million from the year-earlier quarter.

Actual vs. Wall St. Expectations: Piper Jaffray Companies reported adjusted net income of 88 cents per share. By that measure, the company beat the mean analyst estimate of $0.69. It beat the average revenue estimate of $129.87 million.

Quoting Management: “We produced solid results for the quarter and the year despite adverse market conditions facing several of our businesses,” said Andrew S. Duff, chairman and chief executive officer. “Compared to the prior quarter, strong performance in M&A and public finance, and improved results in equities, more than offset weaker results in our fixed income trading businesses, while our equity capital raising and asset management businesses were flat sequentially…

…Our strategy served us well as we focused our resources on our businesses where we are strongest, working to generate higher margins and improving our return on equity. Key execution steps in 2012 included adding resources in public finance, fixed income and M&A, creating more flexibility with our lenders, reducing costs, and exiting businesses that lacked sustainability or did not contribute meaningfully to our results. These efforts contributed to an improvement in ROE to 5.7%(6) in 2012 compared to 2.3%(6) in 2011.”

Key Stats:

Revenue increased 0.59% from $140.08 million in the previous quarter. Net income decreased 20.65% from $19.66 million in the previous quarter.

Looking Forward: Analysts have a neutral outlook for the company’s next-quarter performance. Over the past three months, the average estimate for next quarter’s earnings is a profit of $0.55 and has not changed. For the current year, the average estimate has moved up from a profit of $1.82 to a profit of $1.88 over the last ninety days.

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(Company fundamentals provided by Xignite Financials.)