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Greenhill Profit Falls as Fees From Advising Clients Decline

Oct. 17 (Bloomberg) -- Greenhill & Co., the advisory firm that’s expanding in Brazil and Australia, said third-quarter profit fell 79 percent, missing analysts’ estimates, as revenue from advising clients plunged.

Net income dropped to $1.8 million, or 6 cents a share, from $8.59 million, or 28 cents, a year earlier, the New York-based firm said today in a statement. The average estimate of eight analysts surveyed by Bloomberg was 12 cents.

The third quarter and first nine months of the year reflected the “continued slow pace” of dealmaking, Greenhill Chief Executive Officer Scott Bok, 54, said on a conference call after results were released. Still, the firm expects full-year advisory revenue to increase “slightly” from 2012, he said.

“It seems clear that this will be another year of significant market share gains for us,” Bok said.

Advisory revenue in the quarter dropped 35 percent to $47 million from a year earlier, even as those fees climbed 11 percent to $211.5 million in the first nine months of the year. Bok said North America and the U.S. are the strongest-performing deal markets, while Europe has shown “significant improvement.”

Greenhill set aside $27.1 million, or 61 percent of revenue, for compensation in the third quarter, compared with $33.3 million, or 53 percent, a year earlier.

The company posted an investment loss of $2.4 million in the quarter compared with a loss of $10 million a year earlier. The improvement resulted from a smaller drop in the value of its stake in Iridium Communications Inc., according to the statement. Chief Financial Officer Christopher Grubb said today he expects Greenhill to exit its Iridium holdings “shortly.”

Greenhill rose 1.7 percent to close at $47.88 in New York. The shares have dropped 7.9 percent this year, compared with the 30 percent jump in the Russell 2000 Index of small companies.

To contact the reporter on this story: Laura Marcinek in New York at lmarcinek3@bloomberg.net.

To contact the editor responsible for this story: Christine Harper at charper@bloomberg.net; David Scheer at dscheer@bloomberg.net

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