The continued doldrums in the world of mergers and acquisitions weighed on Greenhill & Company‘s third quarter, as the investment bank’s profit missed analysts’ earnings estimates.
Greenhill said on Wednesday that it earned $8.6 million for the quarter, flat from the same time a year ago. That amounted to 28 cents a share, far short of the average analyst estimate of 38 cents a share, according to Standard & Poor’s Capital IQ.
Documents: Greenhill press release (PDF)
Graphic: Wall St. Earnings CalendarAnd while the firm’s overall revenue rose nearly 4 percent during the quarter, its core advisory revenue fell more than 12 percent, to $72.8 million. (Total revenue was bolstered by a smaller mark-to-market loss on Greenhill’s investment in Iridium Communications than it reported a year ago.)
In after-hours trading on Wednesday, shares of Greenhill fell 4 percent , to $49.
But the firm sought to highlight positives, including a number of advisory assignments that closed during the quarter. Those included the sale of Merlin Securities to Wells Fargo and the representation of the board of Kinder Morgan Energy Partners on the sale of some pipeline assets.
And the investment bank added that the size of its revenue drop was smaller than the 18 percent by which announced mergers activity fell from the year-ago period, according to Thomson Reuters.
“Global transaction activity remained weak in the third quarter and for the year to date,” Robert Greenhill, the firm’s chairman, said in a statement. “While that inevitably affects our performance in absolute terms, we are pleased that we continued to demonstrate an ability to increase our market share in the pool of advisory fees globally.”
And Greenhill pointed out that its payouts to executives as a percentage of expenses stayed steady at 53 percent.