Raymond James Financial Inc. (RJF) reported impressive results on the back of strong performance by its asset management and private client group divisions. The company's fiscal first-quarter 2014 earnings per share of 81 cents outpaced the Zacks Consensus Estimate of 73 cents. Moreover, this was significantly above the prior-year quarter figure of 61 cents.
Results benefited from top-line growth, partly offset by higher expenses. Further, a considerable rise in assets under discretionary management and assets under administration were among the positives.
Non-GAAP net income stood at $116.7 million, up 21% year over year.
GAAP net income for the reported quarter came in at $116.7 million or 81 cents per share, compared with $85.9 million or 61 cents per share in the prior-year quarter.
Behind the Headlines
Raymond James’ total revenue for the quarter came in at $1.2 billion, climbing 6% year over year. The rise was mainly attributable to increase in securities commissions and fees, investment advisory fees as well as account and service fees. These were partially offset by a fall in investment banking revenue and interest income. Also, this surpassed the Zacks Consensus Estimate of $1.1 billion.
Non-interest expenses rose 4% from the prior-year quarter to $1.0 billion. This was primarily due to increase in compensation and benefits expenses, business development costs and investment sub-advisory fees, partly offset by a fall in clearance and floor brokerage costs.
As of Dec 31, 2013, client assets under administration rose 15.1% year over year to $446.5 billion while assets under discretionary management climbed 30.1% to $60.5 billion.
As of Sep 30, 2013, Raymond James reported total assets of $21.9 billion, down 1.8% year over year. Shareholders’ equity came in at $3.8 billion, increasing 11.9% from $3.4 billion in the prior-year.
Book value per share as of Dec 31, 2013 was $27.07, up from $24.59 as of Dec 31, 2012.
In tune with its robust results in fiscal 2013, Raymond James started fiscal 2014 on a positive note. A strong balance sheet and continued efforts to boost segmental performances are likely to strengthen the company’s financials going forward.
However, regulatory issues, a low interest-rate environment, sluggish economic growth and persistently rising expenses are likely to pose as headwinds.
Currently, Raymond James carries a Zacks Rank #2 (Buy)
Performance of Other Investment Brokerage Firms
Interactive Brokers Group, Inc.’s (IBKR) reported fourth-quarter earnings per share of 7 cents, missing the Zacks Consensus Estimate of 15 cents. Results were primarily affected by higher operating expenses and a weak performance in its Market Making segment.
The Charles Schwab Corp.’s (SCHW) fourth-quarter 2013 earnings of 23 cents per share beat the Zacks Consensus Estimate of 21 cents. Results benefited from top-line growth and a benefit from provision, partially offset by higher expenses.
TD Ameritrade Holding Corp. (AMTD) reported fiscal first-quarter 2014 earnings of 35 cents per share, which beat the Zacks Consensus Estimate of 32 cents. Better-than-expected results came on the back of increased revenues, partially offset by higher expenses.
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