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Press Release
Release No. 0706-05
July 26, 2006
Printable version (PDF)
RAYMOND JAMES FINANCIAL, INC.
ANNOUNCES THIRD QUARTER RESULTS;
REPORTS RECORD REVENUE
ST. PETERSBURG, Fla. – Raymond James Financial, Inc. today reported a 75 percent increase over the prior year’s quarter in unaudited net income to $56,774,000, or $0.48 per diluted share, for the third quarter ended June 30, 2006. In comparison, the firm earned $32,382,000, or $0.29 per diluted share, for fiscal 2005’s third quarter. Net revenues increased 28 percent to $629,668,000, setting another quarterly record.
Unaudited net income for the nine months of fiscal 2006 was reported at $163,414,000, up 54 percent from 2005’s $106,322,000, while net revenues for the period increased 19 percent to $1,749,006,000 from $1,475,647,000 the previous year. Diluted earnings per share were $1.41, up from $0.94 for last year’s comparable period.
The company’s results include a one-time adjustment to financial service fees related to a change from recording IRA fees on a cash basis to an accrual basis. Excluding this $8.2 million favorable adjustment, net revenues were $621,498,000, up 26 percent over the prior year, and net income was $51,709,000 or $0.44 per diluted share for the quarter, up 52 percent from the prior year’s $0.29 per diluted share.
Year-to-date operating earnings, excluding the financial service fee adjustment in the current quarter and the gain on the sale of seats on the NYSE and Montreal Stock exchanges in the previous quarter, were $148,033,000, or $1.28 per diluted share, up 36 percent from the prior year’s $0.94 per diluted share.
“Given the erratic behavior of the stock market arising from renewed hostilities in the Middle East, higher gas prices and continued increases in interest rates to stem inflationary pressures, our revenues and earnings results in our third fiscal quarter were remarkably good. The uncertainty occasioned by the aforementioned economic and political factors, as well as the heightened activity of insurgents in Iraq, obviously impacts investor confidence and activity negatively,” stated Chairman and CEO Thomas A. James.
“All segments of our business contributed to profit improvement. The increase in the Private Client Group segment’s contribution, resulting from higher levels of commissions and fees, excellent recruiting results, and lower legal activity, was the major factor in the improvement.
“Although U.S. corporate earnings continue to be surprising on the upside, it is unlikely that the underlying negative conditions, which are not controllable, at least by us, won’t begin to impinge on results. One can already see lower rates of new issue activity and a flattening in the growth rate of assets under management as the market loses its positive momentum. Accordingly, I’m less optimistic about the near-term outlook.”
The company will conduct its quarterly conference call July 27 at 4:15 p.m. EST. The telephone number is 800-773-5520. The call will also be available on demand on the company’s Website, raymondjames.com, under “About Raymond James Financial,” “Financial Reports.” The subjects to be covered may also include forward-looking information. Questions may be posed to management by participants on the call, and in response the company may disclose additional material information.
Raymond James Financial (NYSE-RJF) is a Florida-based diversified holding company providing financial services to individuals, corporations and municipalities through its subsidiary companies. Its three wholly owned broker/dealers, Raymond James & Associates, Raymond James Financial Services and Raymond James Ltd., have more than 4,800 financial advisors serving approximately 1.4 million accounts in 2,200 locations throughout the United States, Canada and overseas. In addition, total client assets are approximately $169 billion, of which $31.6 billion are managed by the firm’s asset management subsidiaries.
To the extent that Raymond James makes or publishes forward-looking statements (regarding economic conditions, management expectations, strategic objectives, business prospects, anticipated expense savings, financial results, anticipated results of litigation and regulatory proceedings, and other similar matters), a variety of factors, many of which are beyond Raymond James’ control, could cause actual results and experiences to differ materially from the expectations and objectives expressed in these statements. These factors are described in Raymond James’ 2005 annual report on Form 10-K, which is available on raymondjames.com and sec.gov.
Raymond James Financial, Inc.
Unaudited Report
For the third quarter ended June 30, 2006
(all data in thousands, except per share earnings) |
| |
Third Quarter |
Nine Months |
| |
2006 |
2005 |
Percent
Change |
2006 |
2005 |
Percent
Change |
Gross revenues |
$711,357 |
$526,362 |
35% |
$1,943,522 |
$1,563,066 |
24% |
Net revenues |
629,668 |
493,544 |
28% |
1,749,006 |
1,475,647 |
19% |
Net income |
56,774 |
32,382 |
75% |
163,414 |
106,322 |
54% |
Earnings per share – diluted |
0.48 |
0.29 |
66% |
1.41 |
0.94 |
50% |
|
Weighted average common and common equivalent shares outstanding - diluted
|
116,960 |
113,382 |
|
115,556 |
113,240 |
|
Balance Sheet Data |
| |
June
2006 |
March
2006 |
Sept
2005 |
June
2005 |
Total assets |
$10.8 bil. |
$10.1 bil. |
$ 8.4 bil. |
$7.8 bil. |
Shareholders' equity |
$1,444 mil. |
$1,380 mil. |
$1,242 mil. |
$1,192 mil. |
Book value per share |
$12.40 |
$11.88 |
$10.95 |
$10.55 |
Management Data |
| |
Quarter Ended |
| |
June
2006 |
March
2006 |
Sept.
2005 |
June
2005 |
Total financial advisors: |
|
|
|
|
United States |
4,529 |
4,544 |
4,591 |
4,537 |
Canada |
323 |
314 |
295 |
282 |
# Lead managed/co-managed
Corporate public offerings in U.S. |
27 |
21 |
32 |
20 |
Corporate public offerings in Canada |
7 |
5 |
5 |
3 |
Financial assets under management |
$31.6 bil. |
$31.2 bil. |
$ 27.5 bil. |
$26.2 bil. |
Client Assets |
$169 bil. |
$167 bil. |
$151 bil. |
$142 bil. |
Client Margin Balances |
$1,405 mil. |
$1,335 mil. |
$1,230 mil. |
$1,214 mil. |
|
Three Months Ended |
Nine Months Ended |
| |
June 30,
2006 |
June 24,
2005 |
June 30,
2006 |
June 24,
2005 |
Revenues: |
|
|
|
|
Private Client Group |
$ 458,622 |
$ 341,010 |
$ 1,251,272 |
$ 1,019,478 |
Capital Markets |
133,004 |
107,378 |
361,796 |
331,202 |
Asset Management |
51,384 |
43,689 |
146,459 |
125,661 |
RJBank |
28,457 |
12,243 |
68,975 |
31,046 |
Emerging Markets |
17,511 |
8,213 |
43,360 |
27,521 |
Stock Loan/ Borrow |
16,850 |
8,797 |
42,605 |
21,386 |
Other |
5,529 |
5,032 |
29,055 |
6,772 |
Total |
$ 711,357 |
$ 526,362 |
$1,943,522 |
$1,563,066 |
Pre-tax Income: |
|
|
|
|
Private Client Group |
$54,246 |
$17,989 |
$129,588 |
$81,634 |
Capital Markets |
20,904 |
15,210 |
57,564 |
45,504 |
Asset Management |
12,955 |
10,292 |
35,072 |
29,107 |
RJBank |
4,632 |
3,379 |
10,058 |
9,457 |
Emerging Markets |
3,830 |
1,222 |
7,393 |
3,960 |
Stock Loan/ Borrow |
2,422 |
2,046 |
6,970 |
4,381 |
Other |
(2,487) |
1,338 |
16,502 |
367 |
Pre-tax Income |
96,502 |
51,476 |
263,147 |
174,410 |
Minority Interest |
(2,173) |
(512) |
(6,734) |
2,178 |
Total |
$94,329 |
$50,964 |
$256,413 |
$176,588 |
RAYMOND JAMES FINANCIAL, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF OPERATIONS
(UNAUDITED)
Quarter-to-Date |
(in thousands, except per share amounts) |
|
|
|
|
|
| |
Three Months Ended |
| |
June 30,
2006 |
June 24,
2005 |
%
Change |
March 31,
2006 |
%
Change |
Revenues: |
|
|
|
|
|
Securities commissions and fees |
424,594 |
349,364 |
22% |
395,009 |
7% |
Investment banking |
44,075 |
30,544 |
44% |
38,856 |
13% |
Investment advisory fees |
46,371 |
38,674 |
20% |
43,486 |
7% |
Interest |
125,860 |
66,354 |
90% |
106,622 |
18% |
Net trading profits |
5,671 |
2,722 |
108% |
8,189 |
(31%) |
Financial service fees |
38,288 |
20,507 |
87% |
25,101 |
53% |
Other |
26,498 |
18,197 |
46% |
39,555 |
(33%) |
| |
|
|
|
|
|
TOTAL REVENUES |
711,357 |
526,362 |
35% |
656,818 |
8% |
Interest Expense |
81,689 |
32,818 |
149% |
64,016 |
28% |
NET REVENUES |
629,668 |
493,544 |
28% |
592,802 |
6% |
| |
|
|
|
|
|
Non-Interest Expenses |
|
|
|
|
|
Compensation, commissions and benefits |
429,224 |
348,361 |
23% |
399,645 |
7% |
Communications and information processing |
25,858 |
23,948 |
8% |
26,698 |
(3%) |
Occupancy and equipment costs |
18,701 |
16,695 |
12% |
18,110 |
3% |
Clearance and floor brokerage |
8,781 |
6,769 |
30% |
5,060 |
74% |
Business development |
21,782 |
17,057 |
28% |
19,695 |
11% |
Other |
30,993 |
29,750 |
4% |
32,330 |
(4%) |
TOTAL NON-INTEREST EXPENSES |
535,339 |
442,580 |
21% |
501,538 |
7% |
| |
|
|
|
|
|
Income before provision for income taxes |
94,329 |
50,964 |
85% |
91,264 |
3% |
Provision for income taxes |
39,728 |
19,094 |
108% |
33,779 |
18% |
Minority Interest |
(2,173) |
(512) |
(324%) |
(4,046) |
46% |
Net Income |
$56,774 |
$32,382 |
75% |
$61,531 |
(8%) |
Net Income per share basic |
$0.50 |
$0.29 |
72% |
$0.54 |
(7%) |
Net Income per share diluted |
$0.48 |
$0.29 |
66% |
$0.53 |
(9%) |
Weighted average common shares outstanding-basic |
113,464 |
110,495 |
|
113,194 |
|
Weighted average common and common equivalent shares outstanding-diluted |
116,960 |
113,382 |
|
116,412 |
|
RAYMOND JAMES FINANCIAL, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF OPERATIONS
(UNAUDITED)
Year-to-Date |
(in thousands, except per share amounts) |
|
|
|
| |
Nine Months Ended |
| |
June 30,
2006 |
June 24,
2005 |
%
Change |
Revenues: |
|
|
|
Securities commissions and fees |
1,186,079 |
1,048,206 |
13% |
Investment banking |
112,645 |
87,436 |
29% |
Investment advisory fees |
132,603 |
115,233 |
15% |
Interest |
320,532 |
178,161 |
80% |
Net trading profits |
19,717 |
19,919 |
(1%) |
Financial service fees |
86,441 |
64,665 |
34% |
Other |
85,505 |
49,446 |
73% |
| |
|
|
|
TOTAL REVENUES |
1,943,522 |
1,563,066 |
24% |
Interest Expense |
194,516 |
87,419 |
123% |
NET REVENUES |
1,749,006 |
1,475,647 |
19% |
| |
|
|
|
Non-Interest Expenses: |
|
|
|
Compensation, commissions and benefits |
1,195,488 |
1,039,762 |
15% |
Communications and information processing |
77,152 |
67,205 |
15% |
Occupancy and equipment costs |
54,213 |
48,570 |
12% |
Clearance and floor brokerage |
19,607 |
18,014 |
9% |
Business development |
58,608 |
47,303 |
24% |
Other |
87,525 |
78,205 |
12% |
TOTAL NON-INTEREST EXPENSES |
1,492,593 |
1,299,059 |
15% |
| |
|
|
|
Income before provision for income taxes |
256,413 |
176,588 |
45% |
Provision for income taxes |
99,733 |
68,088 |
46% |
Minority Interest |
(6,734) |
2,178 |
(409%) |
Net Income |
$ 163,414 |
$ 106,322 |
54% |
Net Income per share basic |
$1.45 |
$0.97 |
49% |
Net Income per share diluted |
$1.41 |
$0.94 |
50% |
Weighted average common shares outstanding-basic |
112,376 |
109,980 |
|
Weighted average common and common equivalent shares outstanding-diluted |
115,556 |
113,240 |
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– 30 –
For more information, please contact Tracey Bustamante at 727-567-2824.
Please visit the Raymond James Press Center at raymondjames.com/media.
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