Raymond James Financial Inc
) fiscal second-quarter 2013 (ended Mar 31) earnings per share
came in at 68 cents, missing the Zacks Consensus Estimate of 75
cents. However, this compares favorably with the year-ago
earnings of 64 cents.
Results were adversely affected by increased expenses, partially
offset by top-line improvement. Growth in assets under management
(AUM) and assets under administration were also among the
GAAP net income for the reported quarter came in at $80.0 million
or 56 cents per share, compared with $68.8 million or 52 cents
per share in the prior-year quarter.
Behind the Headlines
Raymond James' total revenue for the quarter came in at $1,170.1
million, surging 31.5% year over year. The elevation was largely
driven by improvement in securities commissions and fees,
investment advisory fees, interest income, account and service
fees as well as other revenues, partially offset by a decline in
investment banking and net trading profits. This surpassed the
Zacks Consensus Estimate of $1,119.0 million by 4.6%.
Non-interest expenses increased 28.8% from the prior-year quarter
to $983.8 million. The hike was primarily attributable to
elevated compensation and benefits expenses, communications and
information processing, occupancy and equipment costs, clearance
and floor brokerage costs as well as business development
expenses, acquisition related expenses along with investment
sub-advisory fees and other expenses. Higher expenses were
mitigated by lower bank loan loss provision.
As of Mar 31, 2013, assets under administration rose 39.0% year
over year to $407.0 billion. Similarly, AUM totaled $51.0
billion, increasing 30.0% from the year-ago quarter.
As of Mar 31, 2013, Raymond James reported total assets of $22.7
billion, up 17.6% year over year. Shareholders' equity came in at
$3.5 billion, increasing 12.4% from $3.1 billion in the
prior-year quarter. Book value per share at the end of the
quarter was $25.14 compared with $22.84 at the end of the
Quarterly Results of Other Asset Managers
The Charles Schwab Corporation
) first-quarter 2013 earnings marginally missed the Zacks
Consensus Estimate by a penny. Lower-than-expected results were
attributable to higher operating expenses and a rise in provision
for loan losses, partially offset by top-line growth.
TD Ameritrade Holding Corporation
) fiscal second-quarter 2013 (ended Mar 31, 2013) earnings
marginally beat the Zacks Consensus Estimate.
Better-than-expected results reflected a rise in revenues and
decline in operating expenses.
Interactive Brokers Group, Inc
) first-quarter 2013 earnings missed the Zacks Consensus
Estimate. The results lagged marginally owing to a fall in top
line, partially offset by a decline in operating expenses.
Raymond James' strong balance sheet and its efforts to boost
revenue by recruiting experienced advisors are expected to be
accretive to its financials going forward. Alongside, the
company's strong capital position and capital deployment
activities should make its stock attractive for yield-seeking
On the other hand, regulatory issues, a low interest-rate
environment, sluggish economic growth and continuously rising
expenses are expected to hamper its top-line improvement.
Currently, Raymond James carries a Zacks Rank #3 (Hold).
TD AMERITRADE (AMTD): Free Stock Analysis
INTERACTIVE BRK (IBKR): Free Stock Analysis
RAYMOND JAS FIN (RJF): Free Stock Analysis
SCHWAB(CHAS) (SCHW): Free Stock Analysis
To read this article on Zacks.com click here.