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Shares of Raymond James RJF lost 2.3% in after-hours trading in response to lower-than-expected second-quarter fiscal 2025 results (ended March 31). Adjusted earnings of $2.42 per share lagged the Zacks Consensus Estimate of $2.44. The bottom line, however, grew 5% from the prior-year quarter.
Results were affected by higher non-interest expenses and subdued investment banking performance. CEO Paul Shoukry said, “The investment banking pipeline remains robust, although the timing of closings has been impacted by the macroeconomic uncertainty associated with tariff negotiations.”
On the other hand, decent brokerage performance in the Capital Markets segment and robust performance in the Private Client Group and Asset Management segments supported RJF’s results. The acquisitions over the past years aided the company’s financials.
Net income available to common shareholders (GAAP basis) was $493 million or $2.36 per share, up from $474 million or $2.22 per share in the prior-year quarter.
RJF’s Revenues Increase, Expenses Rise
Quarterly net revenues were $3.40 billion, up 9% year over year. The top line missed the Zacks Consensus Estimate of $3.43 billion.
Segment-wise, in the reported quarter, the Private Client Group recorded 6% growth in net revenues, Asset Management’s net revenues rose 15% and Capital Markets’ top line jumped 23%. Further, Bank registered a rise of 2% from the prior year's net revenues, while Others recorded a 9% fall in net revenues.
Non-interest expenses rose 9% from the prior-year quarter to $2.73 billion. The increase was largely due to a jump in compensation, commissions and benefits costs and investment sub-advisory fees. Our estimate for non-interest expenses was $2.75 billion. Further, RJF recorded bank loan provision for credit losses of $16 million in the reported quarter, down 24%.
As of March 31, 2025, client assets under administration were $1.54 trillion, up 6% from the prior-year quarter. Financial assets under management of $245 billion grew 8%. Our estimates for client assets under administration and financial assets under management were $1.6 trillion and $251.1 billion, respectively.
RJF’s Balance Sheet & Capital Ratios Strong
As of March 31, 2025, Raymond James had total assets of $83.13 billion, up 1% from the prior quarter. Total equity rose 2% to $12.13 billion.
Book value per share was $59.74, up from $52.60 as of March 31, 2024.
As of March 31, 2025, the total capital ratio was 24.8% compared with 23.3% as of March 31, 2024. The Tier 1 capital ratio was 23.5% compared with 21.9% as of March 2024-end.
Return on common equity (annualized basis) was 16.4% at the end of the reported quarter compared with 17.5% a year ago.