Jefferies Announces First Quarter 2024 Financial Results

Jefferies Announces First Quarter 2024 Financial Results

NEW YORK--(BUSINESS WIRE)--March 27, 2024--

Jefferies Financial Group Inc. (NYSE: JEF)

Q1 Financial Highlights

   --  Net earnings attributable to common shareholders of $150 million, or 
      $0.66 per diluted common share, and net earnings attributable to common 
      shareholders from continuing operations of $157 million, or $0.69 per 
      diluted common share. Adjusting our results this quarter for a pre-tax 
      loss of $55 million associated with our investment in Weiss 
      Multi-Strategy Advisers, which recently announced it is closing down, our 
      net earnings attributable to common shareholders from continuing 
      operations was $196 million16, or $0.8716 per diluted common share. Of 
      the pre-tax loss to us of $55 million, $30 million reduced our Asset 
      Management net revenues and $25 million increased our non-compensation 
      expenses. 
   --  Annualized return on adjusted tangible total equity from continuing 
      operations1 of 9.8%. Adjusting for the impact of the loss on Weiss, our 
      annualized return on adjusted tangible total equity from continuing 
      operations was 12.0%1 
   --  Net revenues of $1.74 billion 
          --  Investment Banking net revenues of $740 million 
          --  Capital Markets net revenues of $712 million, our third best 
             Capital Markets quarter ever 
          --  Asset Management net revenues (before allocated net interest4) 
             of $288 million, which was $30 million lower due to the Weiss 
             loss 
   --  At February 29, 2024, we had 212.0 million common shares outstanding 
      and 253.5 million shares outstanding on a fully diluted basis2. Our book 
      value per common share was $46.13 and tangible book value per fully 
      diluted share3 was $30.89 at February 29, 2024

“Our Q1 results reflect solid performance across our businesses and our Investment Banking pipeline continues to strengthen, which leads us to believe a more robust market is developing. Our strong results in Capital Markets has continued into the current quarter. We are pleased that, adjusting for the impact of the net loss on Weiss, we generated an annualized return on adjusted tangible equity from continuing operations of 12.0% and net earnings from continuing operations of $0.87 per diluted common share. This bodes well for the balance of 2024, especially as we expect our recent significant hires to increasingly contribute to our results.

“Investment Banking net revenues for the quarter were $740 million, up 28.2% from the prior quarter and 31.4% from the same quarter last year, primarily due to improved mergers and acquisitions and equity underwriting activity reflecting our market share gains against modest improvement in the market. Capital Markets continued its strong performance, with net revenues of $712 million, up 47.9% from the prior quarter and 8.8% versus the same quarter last year. We expect our Investment Banking momentum to continue, and the market share gains we have achieved compared to the prior quarter and prior year quarter across Advisory, Equity underwriting and Leveraged finance to continue, as the investments we have made in our business further mature. Furthermore, we are extremely pleased with our alliance with SMBC, which continues to gain traction and is additive to our business model and prospects. We believe we will further expand our cooperation to additional regions and further areas of mutual opportunity.

“Asset Management also performed well, as we are seeing improved performance from our diversified platform of offerings. We are disappointed in the outcome at Weiss Multi-Strategy, but we are pleased that the shutdown was orderly and investors protected. Our loss is a result of support we provided the platform that was incremental to our separately managed account.”

Richard Handler, CEO, and Brian Friedman, President

Quarterly Cash Dividend

The Jefferies Board of Directors declared a quarterly cash dividend equal to $0.30 per Jefferies common share, payable on May 30, 2024 to record holders of Jefferies common shares on May 20, 2024.

Financial Summary

(Dollars in thousands, 
except per share 
amounts)                         Three Months Ended 
-----------------------  -----------------------------------  ---------- 
                                              February 28, 
                         February 29, 2024      2023(14)       % Change 
-----------------------  -----------------  ----------------  ---------- 
Net revenues: 
Investment Banking and 
 Capital Markets          $     1,451,288    $    1,217,132      19% 
Asset Management                  273,383            68,455     299% 
Other                              13,532            (2,095)    N/M 
-----------------------      ------------       -----------   -----  --- 
Net revenues                    1,738,203         1,283,492      35% 
-----------------------      ------------       -----------   ----- 
Net earnings from 
 continuing operations 
 before income taxes              220,242           158,018      39% 
Income tax expense                 55,959            28,694      95% 
-----------------------      ------------       -----------   ----- 
Net earnings from 
 continuing operations            164,283           129,324      27% 
Net losses from 
 discontinued 
 operations, net of 
 income tax benefit                (7,891)               --     N/M 
-----------------------      ------------       -----------   -----  --- 
Net earnings                      156,392           129,324      21% 
-----------------------      ------------       -----------   ----- 
Net losses attributable 
 to noncontrolling 
 interests                         (7,438)           (6,055)     23% 
Net losses attributable 
 to redeemable 
 noncontrolling 
 interests                             --              (256)   (100  ) % 
Preferred stock 
 dividends                         14,189             2,016     604% 
-----------------------      ------------       -----------   ----- 
Net earnings 
 attributable to common 
 shareholders             $       149,641    $      133,619      12% 
=======================      ============       ===========   ===== 
Earnings (losses) per 
common share: 
Basic from continuing 
 operations               $          0.71    $         0.56      27% 
Basic from discontinued 
 operations                         (0.03)               --     N/M 
-----------------------      ------------       -----------   -----  --- 
Basic                     $          0.68    $         0.56      22% 
-----------------------      ------------       -----------   ----- 
Diluted from continuing 
 operations               $          0.69    $         0.54      28% 
Diluted from 
 discontinued 
 operations                         (0.03)               --     N/M 
-----------------------      ------------       -----------   -----  --- 
Diluted                   $          0.66    $         0.54      23% 
-----------------------      ------------       -----------   ----- 
Weighted average common 
 shares                           219,902           239,101 
Weighted average 
 diluted common shares            225,168           248,095

N/M — Not Meaningful

Highlights

Three Months Ended February 29, 2024 
------------------------------------------------------------------------------ 
Net earnings attributable to common shareholders of:$150 million, or $0.66 per 
diluted common share $164 million, or $0.69 per diluted common share, from 
continuing operations $196 million, or $0.87 per diluted common share, from 
continuing operations excluding Weiss net loss(16) Repurchased 1.1 million 
common shares for $43 million, an average price of $40.63 per share, in 
connection with net-share settlements related to distributions under our 
equity compensation plans. We had 212.0 million common shares outstanding and 
253.5 million common shares outstanding on a fully diluted basis(2) at 
February 29, 2024. Our book value per common share was $46.13 and tangible 
book value per fully diluted share(3) was $30.89 at February 29, 2024. 
Effective tax rate of 25.4% 
------------------------------------------------------------------------------ 
Investment Banking and Capital Markets 
Investment Banking net revenues of $740 million were higher than the prior 
year comparable period driven by improved performance across advisory, and 
equity and debt underwriting. Advisory net revenues were higher than the same 
quarter last year, attributable to increased mergers and acquisitions volume 
and continued market share gains. Underwriting net revenues of $338 million 
increased from the same quarter last year, as equity underwriting experienced 
periods of increased activity, as equity markets remained robust, as well as 
our expanded capabilities and enhanced market position. Debt underwriting 
activity improved as interest rates and inflationary concerns have stabilized. 
Capital Markets net revenues of $712 million were higher compared to the prior 
year quarter primarily due to stronger performance in Equities attributable to 
increased volumes and more favorable trading opportunities, while Fixed Income 
net revenues remained consistent from the comparable prior year. 
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