JEF - Earnings News on Long Term High Revenue and EPS growth stocks
Jefferies earnings jump 32 pct, shares surge
(Adds segment details, analyst comment, share information)
NEW YORK, Jan 18 (Reuters) - Jefferies Group Inc. <JEF.N>
said on Wednesday that fourth-quarter profit jumped 32 percent,
as merger activity among mid-size companies rose, sending the
investment bank's shares up 7 percent to their highest level
ever.
Jefferies also said it was strengthening its ties to
Massachusetts Mutual Life Insurance Co., in a move that will
help the investment bank secure more funds for the medium-size
clients Jefferies focuses on.
Investment banks across Wall Street have benefited from
rising merger and acquisition advisory activity, and Jefferies
is well positioned to continue profiting from the boom, said
Rick Wetmore, an analyst and portfolio manager at Turner
Investment Partners in Berwyn, Pennsylvania, which owns
Jefferies shares.
"Big companies have a lot of cash on their balance sheet,
and there are a lot medium-size companies that are looking to
get bigger by merging with a larger company," Wetmore said.
Jefferies' investment banking revenue rose to $167.5
million in the fourth quarter, up from $105.7 million a year
earlier.
That helped lift the company's net income for the fourth
quarter to $46.7 million, or 68 cents per share, up from $35.4
million, or 55 cents per share, a year earlier.
Analysts polled by Reuters Estimates on average forecast
profit of 60 cents per share.
Jefferies said it also sold $125 million of convertible
preferred shares to MassMutual. At the same time, MassMutual
and Jefferies each committed an additional $125 million of
equity to a joint lending venture, doubling their previously
committed equity capital.
The increased capital will boost the number of loans the
joint venture can make to mid-size companies, and help
Jefferies to better serve its customers, the investment bank
said in a statement.
Jefferies' shares rose $3.33 to $51.48, a 7 percent
increase to the highest level ever for the company's shares.
Since the beginning of 2005, Jefferies' shares have risen
28 percent, while the Amex Securities Broker Dealer Index
<.XBD> has risen nearly 34 percent.
((Reporting by Dan Wilchins; Reuters Messaging:
dan.wilchins.reuters.com@reuters.net; +1 646 223 6320. editing
by Gunna Dickson))
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nN18196468
18Jan06 17:44 GMT
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