R. James Boosts FAs, But Lowers Earnings

“Good relative results in our Private Client Group, Asset Management Group and Raymond James Bank have been overshadowed by a $10 million reduction in the Capital Markets segment’s profits. Part of that decline relates to the absence of the largest merger fee in our history, which occurred in last year’s first quarter. As a result of the stock market’s volatility and apparently negative direction, underwriting activity has also come to a virtual standstill, which accounts for the rest of the decline. Absent this factor, Raymond James would have achieved earnings generally in line with analysts’ estimates,” James continues.

“The real question is whether the current market decline will worsen as a result of a combination of increasing risk of a recession and higher rates of inflation. Although I do not claim to have a crystal ball, [I believe] that risk has certainly escalated in recent weeks as employment statistics have weakened. If investor perception worsens and/or actual corporate earnings results manifest that reality, results in the financial services sector will continue to disappoint. We will do our best to navigate these troubled waters. In any case, I remain confident that we will continue to outperform our peers.”