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A month has gone by since the last earnings report for Raymond James Financial, Inc. (RJF). Shares have added about 11.1% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Raymond James Financial due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.
Raymond James' Q4 Earnings Beat Estimates on Solid IB Business
Raymond James’ fourth-quarter fiscal 2024 adjusted earnings of $2.95 per share handily surpassed the Zacks Consensus Estimate of $2.44. The bottom line surged 38% from the prior-year quarter.
Results benefited from robust IB and brokerage performance in the Capital Markets segment. The performance of the PCG and Asset Management segments was also solid. The acquisitions over the past years supported the company’s financials. However, higher non-interest expenses acted as a headwind. Further, RJF recorded provisions for the quarter.
Net income available to common shareholders (GAAP basis) was $601 million or $2.86 per share, up from $432 million or $2.02 per share in the prior-year quarter.
For fiscal 2024, adjusted earnings of $10.05 beat the consensus estimate of $9.55 and grew 21% year over year. Net income available to common shareholders (GAAP basis) was $2.06 billion or $9.70 per share, up from $1.73 billion or $7.97 per share in fiscal 2023.
Revenues Improve, Expenses Rise
Quarterly net revenues were $3.46 billion, up 13% year over year. The top line outpaced the Zacks Consensus Estimate of $3.3 billion.
For fiscal 2024, net revenues grew 10% year over year to $12.82 billion, beating the consensus estimate of $12.67 billion.
Segment-wise, in the reported quarter, the Private Client Group recorded 9% growth in net revenues, Asset Management’s net revenues rose 17% and Capital Markets’ top line jumped 42%. Further, Others witnessed a 12% increase in revenues. On the other hand, Bank registered a fall of 4% from the prior year's net revenues.
Non-interest expenses rose 9% from the prior-year quarter to $2.7 billion. The increase was largely due to higher compensation, commissions and benefits costs and investment sub-advisory fees. Our estimate for non-interest expenses was $2.63 billion. Also, Raymond James recorded a bank loan provision for credit losses of $22 million, down 39%.
As of Sept.30, 2024, client assets under administration were $1.57 trillion, up 25% from the prior-year quarter. Financial assets under management of $244.8 billion grew 25%. Our estimates for client assets under administration and financial assets under management were $1.52 trillion and $229.2 billion, respectively.