Evercore Profit Falls 62% as Investment Banking Costs Rise
Earnings excluding certain items fell to $4.32 million, or 10 cents per share, from $11.4 million, or 28 cents, in the year-earlier period, the New York-based firm said in a statement today. The average estimate of five analysts surveyed by Bloomberg was for adjusted earnings of 33 cents a share. Expenses at the firm’s investment banking business climbed to $77.5 million from $61.7 million.
Led by Chief Executive Officer Ralph Schlosstein, Evercore is among investment banks facing declines in mergers-and- acquisitions volume as concern about the European debt crisis and weaker economic growth delay transactions. The amount of globally announced and completed deals fell for the third consecutive quarter in the three months ended March 31, according to data compiled by Bloomberg.
“Our business in any given quarter is affected by the timing of transaction closings, over which we virtually have no control,” Schlosstein, 61, said in the statement. “Despite our disappointing first quarter in advisory, all indications suggest that our performance for the full-year will again be strong.”
Evercore rose 1.8 percent to close at $25.05 yesterday in New York and has lost 5.9 percent this year. Bank of America Corp. this month cut its rating on Evercore’s stock after slower-than-expected M&A business in the first quarter and a drop in the firm’s publicly announced pipeline of deals.
Adjusted net revenue, at $105.5 million in the first quarter, was unchanged from the same period a year earlier. Net revenue from the investment banking unit rose to $85 million from $80.6 million, and net revenue from the investment management division fell to $20.5 million from $24.9 million.
Evercore earned advisory fees from 104 clients in the first quarter, up from 79 last year, and received fees of more than $1 million from 17 clients, compared with 18 a year ago.
Assets under management fell 25 percent from the year- earlier period to $12.9 billion at March 31 as money flowed out of the firm’s institutional business, Evercore said. Investment advisory and management fees declined to $18.7 million from $23 million.
To contact the reporter on this story: Laura Marcinek in New York at firstname.lastname@example.org.