August 23, 2012

Raymond James Reports Mixed July Results

The broker-dealer’s fees and commissions drop a bit from June, though assets remain steady

Raymond James Financial (RJF) said Wednesday that its fees and commissions rose in July compared with last year's results, but were down slightly from June. Assets under administration increased both sequentially and year over year.

Total fees and commissions, which are generated both by the company’s private-client and institutional advisors, were $231.4 million in July. This is down about 3.3% from June but up about 28.6% from July 2011 (before the acquisition of Morgan Keegan).

As of June 30, the number of U.S.-based financial advisors was 5,487—up from 4,532 in the quarter ending March 31, before the Morgan Keegan deal wrapped up, and higher than 4,492 a year ago. Including reps in Canada and the U.K., Raymond James has 6,567 advisors.

“Although the S&P 500 index was up over 1.2% for the month of July, overall trading volumes in both the equity and fixed income markets were weak,” said CEO Paul Reilly (left) in a press release.

(The S&P 500 monthly return was 1.26% in July, compared to 3.96% in June and -2.15% last year.)

The company says its Private Client Group continues “to perform reasonably well.” Assets under administration grew 1% during the month and hit to a record $379 billion. Total assets in June were $376 billion; they were $271 billion in July 2011.

At end of the June 30 quarter, total PCG client assets were $356 billion, down about 1.5% for the quarter, reflecting the 3.3% drop in the S&P 500. Revenues for the group were close to $685 million, a 23% jump from last year and a 21% increase from the previous quarter.

July was “another difficult month” for Raymond James’ Capital Markets segment. Also, institutional fixed-income commissions declined from June, and investment-banking activity was down in both corporate finance and public finance, according to the company.

On the bright side, Raymond James says fixed-income volumes and public-finance activity are improving in August, though the Equity Capital Markets segment “remains challenged.”

Asset Management activities were steady in July, it adds, as assets under management were flat from June at $41 billion. Bank loans grew 1% in July.

“The Morgan Keegan integration remains on track, and we are pleased with our progress to date. Our ultimate profit performance will depend on our successful completion of the integration and a return to a more positive investment climate,” the company stated in a press release. “Investors appear to be in a ‘wait and see’ position given the uncertainties in the U.S. and global economies and the upcoming U.S. elections.”

Its shares were trading down on Thursday by about 1.5% to roughly $34.80.

On Thursday, Raymond James declared a quarterly cash dividend of $.13 per share, payable October 15. “This is the 27th consecutive year in which Raymond James has paid our shareholders a dividend,” said Executive Chairman Thomas A. James, in a statement. “The board is pleased to continue sharing the firm’s success with our shareholders.”

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