Evercore Profit Misses Estimates as Global Deal-Making SlowsLaura Marcinek
Evercore Partners Inc., the advisory firm started by former U.S. Deputy Treasury Secretary Roger Altman, posted a first-quarter profit that missed analysts’ estimates as the pace of global deal-making slowed.
Net income was $6 million, or 16 cents a share, compared with a loss of $3.4 million, or 12 cents, a year earlier, New York-based Evercore said today in a statement. Adjusted earnings, which exclude some items, were $16.8 million, or 37 cents a share, missing the 45-cent average estimate of five analysts surveyed by Bloomberg.
Global announced deal volume declined 1.6 percent to $475 billion in the first quarter from a year earlier, according to data compiled by Bloomberg. That followed a full year in which merger-and-acquisition dollar volume fell for the first time since 2009, the data show. Evercore Chief Executive Officer Ralph Schlosstein, 62, has said he’s seeing an improvement in conditions that could lead to a pickup in deal activity.
The M&A environment is “stable and fine,” Altman said today on a conference call following the results. “It’s not white hot, it’s not cold. And we see that relatively healthy environment continuing for all of 2013.”
Adjusted net revenue climbed 45 percent to $153.4 million, according to the statement. Investment-banking net revenue, which is earned from the advisory, institutional-equities and private-funds businesses, rose 53 percent to $130.4 million. Net revenue from investment management increased 12 percent to $23 million.
A jump in fourth-quarter deal-making caused some transactions that would’ve been completed in the first quarter to instead close last year, taking revenue from the first three months, Schlosstein said on the call. Some transactions were also delayed until the second quarter, he said.
“You’re not going to hear us complain about the environment because it really isn’t bad,” said Altman, who predicted the firm will have “a good 2013.”
The company set aside $91.5 million in compensation, or 60 percent of adjusted net revenue, in the first quarter, compared with $66.4 million, or 63 percent, in the year-earlier period.
Evercore fell 2.4 percent to $36 at 9:53 a.m. in New York. The shares gained 22 percent this year through yesterday, twice the advance of the 478-company Russell 2000 Financial Services Index.