January 22, 2014

Raymond James Posts Strong Quarterly Results

Advisor fees and commissions jump 10% from last year and 6% from the prior quarter, though number of reps stays flat

Raymond James (RJF) said late Wednesday that it had revenue of $1.2 billion in the period ending Dec. 30, a jump of 7% from last year and 5% from the prior quarter.

It also said its profits grew 36% year over year to $116.6 million, or $0.81 per share, in the latest quarter from $85.9 million, or $0.61 per share, for the same period in 2013. (Both results topped Street expectations.)

“Record quarterly pretax income was driven by record results in our Private Client Group and Asset Management segments, which were bolstered by record levels of assets under administration and assets under discretionary management,” said CEO Paul Reilly, in a press release.

“Record revenues and overall expense control helped us achieve our targeted 15% pretax margins,” Reilly said, adding that, excluding certain favorable items, results were in line with analyst expetations.

The company says its net income in the period ending Dec. 30 (which it classifies as its '14 fiscal first quarter) benefited from a favorable tax rate stemming from solid gains in corporate-owned life insurance values and the recognition of certain state tax refunds related to prior years.

Private Client Performance

Raymond James’ advisors brought in net revenues of $776.7 million, up 9% from the year-ago quarter and 5% percent from preceding quarter. The unit’s fees and commissions were $657.5 million, a jump of 10% from last year and 6% from the period ending Sept. 30.

The group’s quarterly pretax income was $71.5 million, up 34% and 11% from a year ago and the preceding quarter, respectively.

Assets under administration reached a record $423 billion, a jump of 14% from the same quarter last year and 5% from the earlier period. Fee-based assets reached $151 billion — or 36% of total assets vs. 32% a year earlier.

The company explains that these results stemmed from higher advisor productivity “and a continued focus on optimizing margins.”

“We continue to retain and attract high-quality financial advisors to our multiple affiliation platforms,” said Reilly, “and we are excited about our recruiting pipeline for 2014.”

The number of advisors in its employee, independent and other channels is now 6,178. That’s a drop of 19 advisors from September and a decline of three from last year.

Two weeks ago, Private Client Group CEO Chet Helck shared his plans to retire in February. He has been with the firm for 25 years and will stay on as a special advisor through year-end as needed.

Scott Curtis, president of its independent advisor channel, and Tash Elwyn, president of its employee advisor channel, are expected to join the firm’s Executive Committee upon approval of the board at its February meeting.

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