Fiscal Q1 Earnings: Raymond James Boosts Profits 90%

Private client net income improves 76% in the period ending Dec. 31, 2010

Raymond James Financial reported fiscal first-quarter net income late Wednesday of roughly $81.7 million, or $0.65 per share, vs. $42.9 million, or $0.35 per share in the same year-ago period.

Net revenue for the quarter ended Dec. 31, 2010, was about $813.8 million, an 18% jump over last year’s first fiscal quarter.

Analysts had expected the company to report earnings of $0.53 cents a share and sales of $758.5 million.

The company’s shares were trading up 1.5% after hours on Wednesday near $34.10.

“This quarter’s record net revenues and record net income are a testament to our management team, which continued to build Raymond James even during the financial meltdown of 2009,” said CEO Paul Reilly (left), in a press release.

Net revenue was 9% higher and net income 18% higher than the preceding quarter.

“Achieving these record levels without the benefit of historic non-bank interest earnings bodes well for our future earnings potential during this economic recovery,” added Reilly.

According to the company, the private client and bank operations led the growth.

Assets under administration were $262 billion vs. $232 in the year-ago quarter, and “advisor productivity continued to improve,” Raymond James said in a press release.

Assets under management grew to a $33.4 billion from $27.6 billion last year as a result of improvement in the stock markets and net inflows, the company says.

Private Client Results

The number of Raymond James financial advisors in the United States, Canada and the United Kingdom stood at 5,080 on Dec. 31, 2010, down 4 FAs from a year ago and a drop of 10 advisors from the previous quarter.

In the United States, the number of FAs dropped by 39 from last year and 14 from last quarter to 4,489 on Dec. 31, 2010,

Sales for the private client group were $519.4 million, up 14% from the year-ago quarter and 5% from the previous quarter. They represented 64% of Raymond James Financial’s total sales in the fiscal first quarter.

Pre-tax income for the private-client operations was $55.7 million, up 76% from $31.7 million last year and a jump of 18% over the prior quarter.

The company says it had total securities fees and commissions of $534.1 million the final three months of 2010, a 14% improvement over the year-ago period and a 7% increase over the prior three month.  

In December, the firm agreed to buy Howe Barnes Hoefer & Arnett to strengthen its financial-institutions practice and add financial advisors.

“We continue to see a slow, but steady, improvement in the economy which augurs well for continued growth in our earnings potential,” said Reilly, in a statement. “We occupy an increasingly unique position in our industry and see many opportunities to leverage our brand, and continue to increase the strength and market position of Raymond James in each of our business segments.”

Read AdvisorOne's 2010 Q4 earnings calendar for the financial sector for release dates and links to earnings stories.

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