Raymond James Beats Q3 Earnings As Revenues Rise

Raymond James Financial Inc. (RJF - Analyst Report) announced third-quarter fiscal 2016 (ended Jun 30) adjusted earnings per share of 93 cents, which surpassed the Zacks Consensus Estimate of 88 cents. Also, on a year-over-year basis, the bottom line was up 2%.

Revenue growth put the spark in the results, though a challenging environment for equity investment banking and trading activity marginally weighed on the top line. Also, while growth in assets acted as a tailwind, an increase in expenses and a significant rise in loan loss provisions were the undermining factors.

After taking into consideration acquisition related charges, net income totaled $125.5 million, down 6% from the year-ago quarter.

Raymond James Financial Inc. (RJF - Analyst Report) EPS BNRI & Surprise Percent - Last 5 Quarters | FindTheCompany

Revenue Growth Supported Results

Net revenues amounted to $1.36 billion, improving 3% year over year. The rise was attributable to an increase in all the revenue components excepting investment banking and other revenues. Further, the reported figure beat the Zacks Consensus Estimate of $1.32 billion.

Segment-wise, for the reported quarter, RJ Bank recorded a revenue increase of 24%. Further, Capital Markets witnessed revenue growth of 8%, while Asset Management and Private Client Group depicted a top-line improvement of 2% and 1%, respectively. On the other hand, Others reported a 41% decline in the top line.

Non-interest expenses increased 4% year over year to $1.17 billion. The rise was largely due to acquisition-related expenses and a drastic increase in bank loan loss provision, partially offset by lower business development costs and investment sub-advisory fees.

As of Jun 30, 2016, client assets under administration grew 7% on a year-over-year basis to $534.5 billion, while financial AUM rose 2% to $71.7 billion.

Strong Balance Sheet & Ratios

As of Jun 30, 2016, Raymond James reported total assets of $28.8 billion, up 16% year over year. Further, shareholders’ equity rose 6% year over year to $4.75 billion.

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