Lazard profit exceeds estimates

The largest independent financial-advisory firm reported a surge in first-quarter profit that beat analysts’ estimates as revenue from advising on mergers doubled

May 1, 2014 @ 10:01 am

+ Zoom

Lazard Ltd., the largest independent financial-advisory firm, reported a surge in first-quarter profit that beat analysts’ estimates as revenue from advising on mergers doubled.

Net income jumped to $80.8 million, or 61 cents a share, from $15.4 million, or 12 cents, a year earlier, the Hamilton, Bermuda-based company said today in a on Thursday. Profit exceeded the 54-cent average estimate of 13 analysts surveyed by Bloomberg.

Chief Executive Officer Kenneth Jacobs, 55, said in February the U.S. economy was improving, giving companies more confidence to do deals. The value of takeovers announced in 2014 hit $1 trillion this week, reaching that level at the fastest pace in seven years after more than $300 billion in deals were announced in April. The $1 trillion threshold wasn’t crossed until June last year.

“We’re starting to see those signs of sentiment improving,” Devin Ryan, an analyst at JMP Securities LLC, said in an interview before earnings were released. “The animal spirits of companies are coming back to the market to pull the trigger on deals.”

Financial-advisory revenue climbed 64 percent to $275.5 million from a year earlier, as fees from advising on mergers doubled to $239.1 million, a record for the first quarter. That contributed to a 31% increase in operating revenue, which climbed to $540.2 million.

CEO CONFIDENCE

“We and a lot of others became more constructive on the macroeconomic environment in the middle of last year, early last year,” Mr. Jacobs said in an interview. “I think we’re starting to see the impact of that on CEO confidence and sentiment in a positive way.”

Lazard said in the statement that the jump in merger revenue was also partly the result of “a relatively low level of completions” in the first three months of 2013.

In asset management, Lazard posted a 9 percent revenue increase to $262.3 million, a record for the first quarter. Last year the firm generated more revenue from asset management than it did from advising on deals for the first time.

Assets under management climbed to a record average of $186 billion, up 9% from a year earlier and 1% more than in the fourth quarter.

Lazard set aside $317.8 million for compensation in the quarter, or 59% of revenue, compared with $248.2 million, or 60%, a year earlier.

(Bloomberg News)

0
Comments

What do you think?

View comments

Recommended for you

Related stories

Sponsored financial news

Featured video

INTV

Ed Slott: Many investors are still not using this IRA strategy to save on taxes

If you have a client who has an IRA that is subject to required minimum distributions and they're donating to charity, they should be using qualified charitable distributions, according to Ed Slott, founder of Ed Slott's Elite IRA Advisor Group.

Video Spotlight

Will It Last As Long As Your Clients Do?

Sponsored by Prudential

Video Spotlight

The Catalyst

Sponsored by Pershing

Latest news & opinion

Brian Block's $4 million bonus was tied to a key metric at ARCP

Prosecution rests case in fraud trial against CFO of American Realty Capital Properties.

Edward Jones is winning the Google search war

Brokerage firm's digital marketing investment helps land it at the top of local and overall search engine results, report finds.

Voya's win in 401(k) fee suit involving Financial Engines bodes well for other record keepers

Fidelity, Aon Hewitt and Xerox HR Solutions are currently defending against similar fiduciary-breach claims.

Collective investment trusts getting more attention from 401(k) advisers

The funds are catching on due largely to lower costs and more product availability, but come with some inherent drawbacks.

Vanguard rides robo-advice wave to $65B in assets

Personal Advisor Services, four times the size of its closest competitor, combines digital and human touch.

X

Subscribe and Save 60%

Premium Access
Print + Digital

Learn more
Subscribe to Print