Jefferies Offers Brighter Outlook After First-Quarter Fee Plunge

(Bloomberg) -- Jefferies Financial Group Inc. said investment banking revenue plunged 36 percent in an “extremely challenging environment" in the past three months, but said activity snapped back in March.

• Jefferies reported results for its fiscal first quarter, which ended in February. The firm said its 1 percent jump in trading revenue was “excellent” given the tough conditions in December’s market plunge.

Key Insights

• Jefferies’s results give another window into how the government shutdown affected revenue across Wall Street. The firm called out the impact of the weeks-long closure on fees, and said business has “resumed its more normal pace” this month.
• Executives at larger banks have bemoaned the first-quarter environment, with UBS Group AG Chief Executive Officer Sergio Ermotti calling it one of the worst in recent history. Jefferies’s report could actually provide some optimism, as the firm said its current investment banking backlog was “robust.”

Market Reaction

• Jefferies shares rose 0.8 percent at 9:30 a.m. in New York. The stock had climbed 7.7 percent this year before Thursday.

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• Companywide profit fell by 66 percent to $47 million from the 2018 period, which ended in March. Total revenue fell 7.5 percent.
• Read the statement here.

To contact the reporter on this story: Jenny Surane in New York at jsurane4@bloomberg.net

To contact the editors responsible for this story: Michael J. Moore at mmoore55@bloomberg.net, Steve Dickson

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