Jefferies' profit falls short of expectations due to weakened bond trading and equity underwriting

From Yahoo Finance: 2025-03-26 16:23:00

Jefferies’ first-quarter profit fell short of expectations due to weakened bond trading and stalled stock market deals amid U.S. trade policy uncertainty. Equity underwriting revenue dropped 39%, but advisory and debt underwriting revenues rose, boosting investment banking performance by 7%. Larger banks like Morgan Stanley and Goldman Sachs are set to report earnings next month.

Geopolitical tensions and policy uncertainty under President Trump have dampened expectations for a rebound in dealmaking. Jefferies’ capital markets business reported a 4% decrease in revenue, with fixed-income net revenues down 18%. Despite challenges, market share gains led to a 17% increase in advisory revenues and a 54% surge in debt underwriting revenue.

Jefferies’ shares fell 4% after reporting a decline in equity underwriting revenue and a decrease in fixed-income net revenues. However, market share gains in advisory and debt underwriting boosted investment banking performance by 7%. Larger Wall Street banks like Morgan Stanley and JPMorgan Chase are expected to report earnings next month, offering insight into the industry’s performance.

Jefferies experienced a decline in revenue from equity underwriting and fixed-income net revenues, but saw a boost in advisory and debt underwriting revenues. The bank’s capital markets business reported a 4% decrease in revenue, with fixed-income net revenues down 18%. Despite challenges, market share gains helped lift investment banking performance by 7%.

Investors got an early look at how Wall Street’s investment banking units may perform in early 2025 as Jefferies’ first-quarter profit missed estimates. Geopolitical tensions and policy uncertainty under President Trump have hindered dealmaking, with equity underwriting revenue declining by 39%. Market share gains in advisory and debt underwriting helped boost investment banking performance by 7%.

Read more: Jefferies profit misses estimates as bond trading, equity underwriting weaken