The firm posted adjusted earnings of 31 cents per share on $711 million in revenue, ahead of the 29 cents on $674 million expected. Both figures were down from the 36 cents and $727 million the company reported in last year's May quarter.
Fixed income revenues were actually 31.4% above prior-year levels -- $293 million vs. $223 million -- while investment banking revenue was down 9.5% -- $297 million vs. $328 million -- as the M&A market remains sluggish despite the piles of cash on corporate balance sheets. That is not to say there was no activity in the quarter, as Jefferies advised Novartis on its $1.5 billion acquisition of dermatology business Fougera Pharmaceuticals.
Jefferies Chairman and Chief Executive Richard Handler said the second-quarter results show "continued strength in investment banking and the durability of our sales and trading platform despite the challenging market environment that again evolved during the quarter.”
On a conference call after the release, Handler said fixed income activity deteriorated over the course of the quarter along with optimism for the global economy, and that the company will keep a tight handle on risk and leverage if current market conditions persist, according to TradeTheNews.com.
Shares of Jefferies opened 5% higher, before pulling back to a 2.6% gain, while its bigger Wall Street brethren like Morgan Stanley and Goldman Sachs were up around 1% apiece.