Lazard dips into red in first quarter

Lazard Ltd., a financial advisory and asset management firm, said today it posted a first-quarter loss as revenue declined and it recorded a previously announced restructuring charge.
APR 28, 2009
Lazard Ltd., a financial advisory and asset management firm, said today it posted a first-quarter loss as revenue declined and it recorded a previously announced restructuring charge. New York-based Lazard lost $53.5 million, or 77 cents per share, during the quarter ended March 31. The firm earned $7.8 million, or 14 cents per share, during the same quarter last year. Analysts polled by Thomson Reuters, on average, forecast earnings of 31 cents per share for the quarter. Analysts do not always include special charges in their estimates. Lazard recorded a $62.6 million pretax charge related to the previously announced restructuring costs as it cut staff and redeployed other employees into new positions. The charges were primarily tied to severance and benefit payments, as well as the acceleration of restricted stock units that were granted to employees whose jobs were cut. Aside from the restructuring charge, Lazard saw a decline in revenue across nearly all of its business lines. "This obviously continues to be a tumultuous environment which impacts the timing and level of our revenue," Bruce Wasserstein, chairman and chief executive of Lazard, said in a statement. Amid the ongoing recession, corporate mergers and acquisition activity has slowed and equity markets have tumbled, which has negatively affected financial advisory and asset management firms such as Lazard. Within its financial advisory unit, mergers and acquisitions and strategic advisory and corporate finance advisory revenue both declined sharply. Mergers and acquisition and strategic advisory revenue fell 42 percent to $96.5 million. Only financial restructuring revenue in the financial advisory unit increased, nearly quadrupling to $61 million as Lazard advised some of the largest firms that entered corporate restructuring plans or filed for bankruptcy protection during the quarter. Lazard is advising 13 of the 25 largest companies that have filed for Chapter 11 bankruptcy since the beginning of the year. The firm has been working on more than 80 restructuring and debt assignments worldwide since the start of 2009. Total revenue from the financial advisory unit declined 23 percent to $163.5 million from $212.4 million during the year-ago period. Revenue from management fees, the primary driver of revenue for Lazard's asset management business, fell 41 percent to $93.5 million during the quarter. Assets under management totaled $81.1 billion at the end of the first quarter, down 11 percent from three months earlier. The decline in assets was partially tied to net outflows, or customers withdrawing money, as well as market depreciation and the strengthening of the dollar against other currencies. Overall, total revenue from the asset management division fell 39 percent to $102.9 million during the quarter.

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