Raymond James Reports Big Jump in Private-Client Profits: Q1 Earnings

Overall, the company's earnings miss estimates, but beat on sales of $1.2 billion

CEO Paul Reilly CEO Paul Reilly

Raymond James Financial (RJF) reported net income Thursday of $104.6 million, or $0.72 per share, in the quarter ended March 31--up 31% from a year ago.

These results, though, were about 10% lower than last quarter’s and missed analysts’ estimates. (The year-ago quarter included a gain from the sale of a private-equity investment, as well as some large expenses tied to the integration of Morgan Keegan.)

Revenue, however, topped estimates at $1.2 billion, a 3% jump from a year ago and basically flat with last quarter. The firm’s Private Client Group reported a 44% jump in pre-tax profits and a 12% boost in revenue

“We had a strong first half of the fiscal year, with a 5% increase in net revenues and a 33% increase in net income over the first half of the prior fiscal year, despite the positive impact of the Albion gains in the year-ago period,” said CEO Paul Reilly, in a press release.

The Private Client Group’s revenue totalled $814.7 million, a 12% year-over-year gain and a 5% jump from the prior quarter. Its pre-tax income soared 44% year over year and 8% sequentially to $77.1 million.

The unit “generated record quarterly results driven by record levels of advisor productivity, which was boosted by market appreciation and strong net new asset growth,” the company says.

Total assets under administration for PCG as of March 31 were $434 billion for the unit. Fee-based assets reached $158 billion, or close to 37% of client assets.

These results “should provide tailwinds for next quarter’s results, as fee-based accounts in this segment are billed based on asset values at the beginning of the quarter,” the company notes.

 “We are very pleased with our continued retention, record average productivity, and the net additions of financial advisors in the Private Client Group this quarter,” added Reilly in a statement.   “Further, recruiting activity remains vibrant in both our employee and independent platforms.”

The total number of advisors in the PCG stood at 6,202 as of March 31 vs. 6,178 on Dec. 31 and 6,165 a year ago. The firm’s U.S.-based independent channel as about 3,288 FAs, while its employee channel has 2,438. 

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