Evercore Profit Rises 19% on Investment-Banking Revenue
Net income excluding certain items climbed to $21.2 million, or 49 cents per share, from $17.8 million, or 43 cents, in the year-earlier period, the New York-based firm said in a statement today. That beat the 48-cent average estimate of five analysts surveyed by Bloomberg.
Altman, 65, chairman of the firm, has said that the ingredients for an upturn in merger-and-acquisition volume are in place, including improving business conditions, higher equity prices and the availability of credit. That will help to overcome impediments such as uncertainty over the European sovereign-debt crisis and the looming U.S. fiscal cliff of spending cuts and tax increases, Altman has said.
“The financial market environment is a challenging one, but our own backlog is strong,” Altman said in today’s statement.
Evercore rose 4.9 percent to close at $21.98 in New York. The firm’s stock has declined 17 percent this year.
Adjusted net revenue rose 23 percent to $172.1 million in the second quarter from the same period a year earlier. The increase was driven by a 35 percent jump in investment-banking adjusted net revenue. The investment-management unit had a 25 percent decline in adjusted net revenue from a year earlier.
Evercore earned advisory fees from 137 clients in the second quarter, compared with 77 in the same period last year and 104 in the first quarter. The firm earned advisory fees in excess of $1 million from 30 transactions, compared with 21 a year earlier and 17 in the first quarter.
The company had assets under management of $11.8 billion at June 30, an 8 percent decline from the first quarter due to net outflows and market depreciation, according to the statement. Assets under management fell by 27 percent from the second quarter last year.
Adjusted net revenue for the first half of 2012 climbed 13 percent to a record $277.6 million from the same period last year. That revenue level is “sustainable” for the rest of the year if Europe remains stable, Chief Executive Officer Ralph Schlosstein, 61, said today on a conference call.
“As we look at our business today, it looks very promising but certainly the rest of the world has some clouds over it,” Schlosstein said. “Longer-term, there are very good reasons to be optimistic about our business.”
Evercore’s adjusted compensation expense rose 24 percent to $102.8 million from $82.8 million a year earlier. The adjusted pro forma compensation ratio was 60 percent of net revenue, compared to 59 percent for the same period last year.
Evercore said last month it added Greenhill & Co.’s George Estey as a managing director in its investment-banking unit to build its business in Canada. The company plans to announce three more managing director hires by next quarter’s results, Altman said today on the call.
The firm expanded its board to nine members and appointed Robert B. Millard as a director, according to a regulatory filing today. Millard, 62, is a managing partner of Realm Partners LLC and serves as chairman of the MIT Investment Management Co., according to the filing.
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