Greenhill & Co., the advisory firm planning to add five to 10 managing directors this year, reported first-quarter profit that missed analysts’ estimates as investment revenue slumped.
Net income fell 16 percent to $13.6 million, or 45 cents a share, from $16.1 million, or 53 cents, a year earlier, the New York-based firm said today in astatement. The average estimate of seven analysts surveyed by Bloomberg was for 67 cents.
Greenhill, run by Chief Executive Officer Scott Bok, 53, has been adding managing directors in anticipation of a pickup in global merger and acquisition activity, which declined last year for the first time since 2009. The firm hired Citigroup Inc.’s Anne Eastep this year to focus on the insurance industry and Carl-Georg Bauer-Schlichtegroll to work with European financial companies in London.
“The data for M&A transactions globally shows a relatively weak level of activity for the first quarter, which has surprised many after a very strong quarter ending last year,” Bok said in the statement.
Total revenue fell 3.7 percent to $79.6 million from a year earlier, missing the $98.3 million average estimate of seven analysts surveyed by Bloomberg. The decline was driven by investment losses of $1.86 million, compared with gains of $9.44 million a year earlier. Revenue from advising clients rose 11 percent to $81.4 million.
The company set aside $42.2 million, or 53 percent of revenue, for compensation expense in the first quarter, compared with $41.2 million, or 50 percent, a year earlier.
Greenhill fell 1.6 percent to close at $51.09 in New York. The shares have slid 1.7 percent this year, trailing the 11 percent advance of the 86-company Standard & Poor’s Midcap Financials Index.