Jefferies Financial Group had a higher profit in the third quarter, as a hot dealmaking market and growth in its capital markets revenue more than offset a decline in the company's asset management business.
The investment bank on Monday reported a profit of $260.6 million, or $1.08 a share, in the quarter ended Aug. 31. That compares with a profit of $224 million, or $1.01 a share, a year earlier.
Revenue rose to $2.22 billion, up from $2.05 billion a year prior.
Analysts polled by FactSet were expecting earnings of $1 a share on $2.2 billion in revenue.
The revenue growth was headlined by Jefferies' investment banking business, which brought in $1.33 billion in revenue during the quarter, up from $1.14 billion in the prior-year quarter. The business gained market share and benefited from strong sponsor-led M&A activity during the third quarter, Jefferies said, highlighting healthcare, industrials, and energy as high-activity sectors.
Revenue from capital markets rose to $802.2 million during the quarter, up from $723.4 million last year. Jefferies attributed the result to a strong performance in global cash and electronic trading, as well growth in prime services. Fixed income was a weak spot, with slowing market activity dragging revenue down 26% to $176 million.
Jefferies also reported a decline in its asset management revenue, which fell to $85.6 million from $176.9 million. Within the segment, asset management fees and investment return revenue fell to $34 million from $84 million a year prior, which Jefferies attributed to "weaker performance across several fund strategies." It said it remains confident in the business's long-term outlook.
Shares of Jefferies fell 3.1% to $45.69 in after-hours trading on Monday.