Jefferies Group's 4Q Loss Widens On Charges, Revenue PlungesLast update: 1/20/2009 9:26:07 AMAnalysts surveyed: 5 Thomson Reuters EPS estimates can reflect either net income, operating income or funds from operations. The company's earnings figure is on a diluted basis. Thomson Reuters assumes earnings estimates from analysts are on a diluted basis.
DOW JONES NEWSWIRES
Jefferies Group Inc.'s (JEF) fourth-quarter net loss ballooned on write-downs for stock-options expensing and a steep drop in revenue, though the investment bank projected a more optimistic outlook for the beginning of this year. Chairman and Chief Executive Richard B. Handler said that with "unprecedented volatility and the worst year for the financial markets in our lifetime, Jefferies is fortunate to have emerged intact and healthy." He added that Jefferies is starting 2009 "with its strongest opening balance sheet ever," adding the firm has "a lower, more flexible and transparent cost structure." Jefferies, one of about a dozen smaller investment banks, reported a net loss of $442.5 million, or $2.41 a share, compared with a loss of $24.2 million, or 17 cents a share, a year earlier. The latest quarter included about $328 million in charges, mostly related to expensing the prior year's employee stock awards. Revenue tumbled 63% to $243.4 million for the bank, which provides services for companies and institutional investors. The latest estimates of analysts polled by Thomson Reuters was for a per-share loss of $2.29 on revenue of $199 million. Jefferies, which has posted losses for five straight quarters, said in December it was laying off 13%, or 300, of its work force, by the end of 2008; closing offices in Dubai, Singapore and Tokyo; and amending its stock compensation plan to cut expenses and shore up its balance sheet. In response, Moody's Investors Service warned it might cut its senior unsecured rating on the investment bank, citing "uncertainty about whether Jefferies can return in the short- to medium-term to a sustainable level of profitability." The ratings agency did call the job cuts and other measures "a step in the right direction." Several analysts also slashed their fourth-quarter and 2009 forecasts on the company. Jefferies is one of several smaller banks that has tried to capitalize on the turmoil affecting its larger peers by hiring top talent in several areas, including its equities and trading divisions. Shares of Jefferies closed Friday's session at $12.54, and there was no pre-market activity. -By Shirleen Dorman, Dow Jones Newswires; 201-938-2310; shirleen.dorman@dowjones.com (END) Dow Jones NewswiresJanuary 20, 2009 09:26 ET (14:26 GMT
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