Jefferies misses profit estimates due to weak equity underwriting but sees potential rebound later

From Yahoo Finance: 2025-06-25 16:21:00

Jefferies’ second-quarter profit fell short of estimates due to weak equity underwriting, but merger advisory fees provided some gains. Investment banking activity slowed in the first two months of the quarter due to uncertainty from U.S. policy and geopolitical events. However, investor confidence has been recovering since May, leading to increased discussions on transaction opportunities.

Jefferies President Brian Friedman noted a significant decrease in uncertainty over the last six to 10 weeks, leading to more willingness from investors, corporates, and sponsors to make decisions based on a positive economic outlook. Hopes for a dealmaking revival have been boosted as market sentiment improves and the potential for a boom in the third and fourth quarters looms.

Jefferies’ net earnings fell nearly 40% to $88 million, missing analyst expectations of 44 cents per share. Revenue from equity underwriting dropped by half to $122.4 million due to market volatility, while debt underwriting revenue remained flat. On the bright side, advisory revenue increased by 61% to $457.9 million, showcasing a gain in market share.

Despite the decline in equity underwriting revenue and net earnings, Jefferies saw a 61% increase in advisory revenue, which helped offset the losses. Revenue from the capital markets business slightly dipped, but the bank’s overall performance is closely watched as a barometer for trends on Wall Street. Larger rivals like JPMorgan Chase, Goldman Sachs, and Morgan Stanley are set to report earnings next month.



Read more at Yahoo Finance: Jefferies profit misses estimate on weak equity underwriting; eyes rebound later in 2025