Raymond James Reports Record Profits, Revenues: Q2 Earnings

Fee-based accounts now make up more than 70% of Private Client Group revenue

CEO Paul Reilly of Raymond James. CEO Paul Reilly of Raymond James.

Raymond James Financial (RJF) reported record net profits of $122.7 million and record net revenues of $1.2 billion in the quarter ended June 30 — with earnings per diluted share increasing 44% from a year ago to $0.85 per share.

Part of that increase in earnings per share can be attributed to $13 million of acquisition-related expenses in the year-ago quarter, but excluding those expenses, the earnings per share still increased 31% from a year ago to $0.65.

Analysts polled by Thomson Reuters had expected earnings of $0.72 per share on revenue of $1.18 billion.

Raymond James' quarterly revenues rose 9% from a year ago and 3% from last quarter.

“We are very proud of our performance for the first three quarters of the fiscal year, as we generated a 15% pretax margin on net revenues and delivered an 11.9% annualized return on equity to our shareholders, essentially reaching our targets for the current market and interest rate environment sooner than expected.” said CEO Paul Reilly in a press release. “While we exceeded those targets in the current quarter, results were lifted by certain favorable items including $8 million of private equity valuation adjustments, a strong quarter in Raymond James Tax Credit Funds, and a continuing beneficial tax rate.”

Private Client Group

Following a big jump in private client profits in the last quarter, Raymond James’ Private Client Group had a record quarterly pretax income of $81.5 million, a 39% increase on a year-over-year basis and a 6% increase from the preceding quarter. Quarterly net revenues were up 10% from a year ago with the private client group reporting $816.9 million in quarter ending June 30.

Total assets under administration for PCG reached a record $454 billion, up 17% from a year ago and 5% from the preceding quarter. Assets in fee-based accounts jumped 27.5% to $168 billion, helping the segment’s recurring revenues grow to over 70% of the segment’s total revenues.

Raymond James attributes these record results in the Private Client Group segment to record levels of client assets and a continued focus on enhancing margins.

The total number of advisors in the PCG stood at 6,251 as of June 30, up 49 from the most-recent quarter. The firm’s U.S.-based independent channel has about 3,320 advisors, while its employee channel has 2,455.

 

--Read Raymond James Reports Big Jump in Private-Client Profits: Q1 Earnings on ThinkAdvisor.

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