Shares of Jefferies Financial Group Inc. (JEF) tumbled 5.37% in after-hours trading on Wednesday following the release of its first-quarter 2025 financial results, which fell short of expectations amid challenging market conditions.

The investment bank reported a net profit of $127.8 million, or $0.57 per share, for the quarter ended February 28, 2025. This marks a significant 14.5% decline from $149.6 million, or $0.69 per share, in the same period last year. The company's performance was particularly impacted by weaknesses in its fixed-income and capital markets businesses.

Jefferies' fixed-income net revenues decreased by 18% to $289 million in Q1, while its capital markets business, which includes trading activities, saw revenues fall by nearly 4% to $698 million. The company attributed these declines to increasingly challenging capital markets, citing uncertainties arising from U.S. policy and geopolitical events.

In their earnings statement, Jefferies' management commented on the difficult operating environment: "The capital markets have become increasingly more challenging due to the uncertainties that have arisen around U.S. policy and geopolitical events." Despite these headwinds, the company remains confident in its long-term growth opportunities and strategy, emphasizing its focus on client needs and maintaining strong liquidity positions.