Jefferies Financial Group reported third-quarter adjusted earnings of $1.08 per share, surpassing analyst estimates of $1.00. Total revenue for the quarter reached $2.22 billion, slightly exceeding the consensus of $2.20 billion and representing a 9% year-over-year increase from $2.05 billion in the prior year period. These strong results were largely driven by record performances in investment banking and equities trading.
The investment banking division saw a 17% increase in revenue to $1.33 billion, with advisory services revenue jumping 25% to $818 million and equity underwriting surging 69% to $305.5 million. The capital markets business also performed well, with revenues rising 11% to $802.2 million, propelled by a record $626.2 million in equities trading, up 29% year-over-year. This strong performance positions Jefferies as an early indicator for upcoming earnings reports from larger Wall Street banks.
However, these gains were significantly offset by a poor showing in the asset management division, where revenues fell sharply by 52% year-over-year to $85.6 million from $176.9 million. This decline reflects weaker performance across several fund strategies, including the Point Bonita fund, which had exposure to the bankrupt auto-parts supplier First Brands, and investments linked to embattled iron ore trader Radiant World. The fixed income division also faced challenges, with revenues decreasing 26% to $176.0 million.
Despite the overall profit beat, Jefferies' shares were down about 1.5% in extended trading and have fallen approximately 24% this year, compared to a 2.2% gain by the S&P 500 bank industry group. This negative market reaction highlights investor concerns over the persistent weaknesses in asset management and fixed income, which overshadowed the record-setting performance in other segments. The company did declare a quarterly dividend of $0.40 per share and authorized a $250 million share buyback program.
