Updated version 2 - Jefferies' record equity earnings offset weakness in asset management business

Full article with additional details

Reuters, September 28 - Jefferies Financial Group (JEF.N) reported third-quarter profits on Monday that exceeded market expectations, thanks to higher fees from advisory and equity underwriting deals, as well as record earnings from its equities trading business.

However, the asset management segment suffered a sharp decline, with fees and investment income shrinking from $84 million a year earlier to $34 million. This reflects weak performance from several fund strategies, including Point Bonita, which previously held positions in the now-bankrupt auto parts supplier First Brands.

• As corporate boards brush off market volatility and take advantage of relaxed regulatory conditions to expand operations, the global total value of M&A deals has already surpassed $4 trillion this year.

• Jefferies' investment banking revenue rose 17% to $1.33 billion, primarily driven by record advisory business and strong equity underwriting performance.

• The New York-based investment bank’s results are closely watched on Wall Street, as they provide an early read on quarterly investment banking trends before major US banks release their earnings in the coming weeks.

• Revenue from Jefferies’ capital markets segment, home to its trading operations, rose 11% to $802 million, mainly due to record equities trading revenue.

• “Given the current strength and diversity of our backlog and new business, we are extremely optimistic about our momentum for the remainder of 2026 and into 2027,” said CEO Richard Handler and President Brian Friedman.

• Handler and Friedman said that as Jefferies continues to reposition its platform, they remain confident in the long-term prospects of the asset management business.

• For the three months ending August 31, Jefferies reported profit attributable to shareholders of $260.6 million, or $1.08 per share. According to data compiled by London Stock Exchange Group (LSEG), analysts on average had expected earnings of $1 per share.

• The shares fell 1.5% in after-hours trading and are down about 24% so far this year.

(To assist non-English speakers, Reuters has automatically translated its reports into several other languages. As automated translations may contain errors or lack necessary context, Reuters does not guarantee the accuracy of the translated text, which is provided solely for reader convenience. Reuters assumes no responsibility for any harm or losses arising from the use of automated translation.)