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Moelis & Company (MC) Q1 Earnings Miss as Revenues Plunge
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Moelis & Company’s (MC - Free Report) first-quarter 2023 adjusted earnings per share of 5 cents missed the Zacks Consensus Estimate of 11 cents. The bottom line reflects a plunge of 95% from the prior-year quarter.
Results were adversely impacted by lower revenues due to soft industry-wide capital markets performance. However, a decrease in expenses acted as a tailwind. Also, the company had a solid liquidity position in the reported quarter.
Net income (GAAP basis) was $3.6 million or 5 cents per share, down substantially from $73.6 million or 94 cents per share.
Revenues & Expenses Decline
Total revenues (GAAP basis) tanked 38% year over year to $187.8 million in the reported quarter. The fall was primarily due to a decrease in average fees earned per completed transaction and a lower number of completed transactions. The top line beat the Zacks Consensus Estimate of $180.7 million.
Total operating expenses (GAAP basis) were $189.2 million, down 11%. The fall was due to a decline in compensation and benefits costs.
Other income (GAAP basis) was $1.7 million in the reported quarter against other expenses of $2.2 million in the prior-year quarter.
As of Mar 31, 2023, the company had cash and liquid investments of $170.3 million, with no debt or goodwill.
Share Repurchase Update
In the reported quarter, the company repurchased 1.1 million shares for $44.5 million.
Our View
Moelis & Company’s global expansion initiatives and diverse operations across sectors and industries bode well. However, heightened geopolitical and macroeconomic uncertainties will continue to adversely impact the company’s financials.
Moelis & Company Price, Consensus and EPS Surprise
Raymond James’ (RJF - Free Report) second-quarter fiscal 2023 (ended Mar 31) adjusted earnings of $2.03 per share missed the Zacks Consensus Estimate of $2.17 by a considerable margin. The bottom line, however, was up 25% from the prior-year quarter. We had projected adjusted earnings per share of $2.15.
A weak investment banking performance amid heightened geopolitical and macroeconomic ambiguities hurt the Capital Markets segment’s results. Also, RJF recorded bank loan provision for credit losses during the quarter on the deteriorating macroeconomic outlook. Further, expenses grew during the quarter.
Yet, higher interest rates and a rise in loan demand acted as tailwinds, which led to a substantial jump in net interest income (NII). Further, the performance of the Private Client Group was robust. Also, the acquisitions over the past years supported RJF’s financials to some extent.
Jefferies Financial Group Inc.’s (JEF - Free Report) first-quarter fiscal 2023 (ended Feb 28) adjusted earnings per share of 55 cents handily surpassed the Zacks Consensus Estimate of 48 cents. The bottom line, however, compared unfavorably with $1.24 earned in the prior-year quarter.
Results benefited from a decline in expenses and better-than-expected capital markets performance. However, lower revenues on dismal segment performance posed a headwind for JEF.
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Moelis & Company (MC) Q1 Earnings Miss as Revenues Plunge
Moelis & Company’s (MC - Free Report) first-quarter 2023 adjusted earnings per share of 5 cents missed the Zacks Consensus Estimate of 11 cents. The bottom line reflects a plunge of 95% from the prior-year quarter.
Results were adversely impacted by lower revenues due to soft industry-wide capital markets performance. However, a decrease in expenses acted as a tailwind. Also, the company had a solid liquidity position in the reported quarter.
Net income (GAAP basis) was $3.6 million or 5 cents per share, down substantially from $73.6 million or 94 cents per share.
Revenues & Expenses Decline
Total revenues (GAAP basis) tanked 38% year over year to $187.8 million in the reported quarter. The fall was primarily due to a decrease in average fees earned per completed transaction and a lower number of completed transactions. The top line beat the Zacks Consensus Estimate of $180.7 million.
Total operating expenses (GAAP basis) were $189.2 million, down 11%. The fall was due to a decline in compensation and benefits costs.
Other income (GAAP basis) was $1.7 million in the reported quarter against other expenses of $2.2 million in the prior-year quarter.
As of Mar 31, 2023, the company had cash and liquid investments of $170.3 million, with no debt or goodwill.
Share Repurchase Update
In the reported quarter, the company repurchased 1.1 million shares for $44.5 million.
Our View
Moelis & Company’s global expansion initiatives and diverse operations across sectors and industries bode well. However, heightened geopolitical and macroeconomic uncertainties will continue to adversely impact the company’s financials.
Moelis & Company Price, Consensus and EPS Surprise
Moelis & Company price-consensus-eps-surprise-chart | Moelis & Company Quote
Currently, Moelis & Company has a Zacks Rank #5 (Strong Sell).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Performance of Other Investment Banks
Raymond James’ (RJF - Free Report) second-quarter fiscal 2023 (ended Mar 31) adjusted earnings of $2.03 per share missed the Zacks Consensus Estimate of $2.17 by a considerable margin. The bottom line, however, was up 25% from the prior-year quarter. We had projected adjusted earnings per share of $2.15.
A weak investment banking performance amid heightened geopolitical and macroeconomic ambiguities hurt the Capital Markets segment’s results. Also, RJF recorded bank loan provision for credit losses during the quarter on the deteriorating macroeconomic outlook. Further, expenses grew during the quarter.
Yet, higher interest rates and a rise in loan demand acted as tailwinds, which led to a substantial jump in net interest income (NII). Further, the performance of the Private Client Group was robust. Also, the acquisitions over the past years supported RJF’s financials to some extent.
Jefferies Financial Group Inc.’s (JEF - Free Report) first-quarter fiscal 2023 (ended Feb 28) adjusted earnings per share of 55 cents handily surpassed the Zacks Consensus Estimate of 48 cents. The bottom line, however, compared unfavorably with $1.24 earned in the prior-year quarter.
Results benefited from a decline in expenses and better-than-expected capital markets performance. However, lower revenues on dismal segment performance posed a headwind for JEF.