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Press Release
Release No. 1006-03
October 25, 2006
Printable version (PDF)
RAYMOND JAMES FINANCIAL, INC.
ANNOUNCES FOURTH QUARTER RESULTS;
REPORTS RECORD ANNUAL NET INCOME AND REVENUES
ST. PETERSBURG, Fla. – Raymond James Financial, Inc. today reported a 14 percent increase in unaudited net income to $50,928,000, or $0.44 per diluted share, for the fourth quarter ended Sept. 30, 2006, on net revenues of $587,081,000, compared to net income of $44,724,000, or $0.39 per diluted share, for fiscal 2005’s fourth quarter.
Unaudited net income for the 12 months of fiscal 2006 was reported at a record $214,342,000, up from 2005’s $151,046,000, while net revenues increased to a record $2,336,087,000 from $2,039,208,000 the previous year. Diluted earnings per share were $1.85 versus $1.33 for last year.
“Unaudited net income in the fourth quarter rose 14 percent over last year on only a four percent increase in net revenues. In light of the fact that securities commissions and fees were flat compared to last year, reflecting investor uncertainty about market direction, the results were gratifying. Record net interest earnings, improved trading profits, higher bank profits and record results in our Raymond James Tax Credit Funds subsidiary were the primary contributors to the increase,” stated Chairman and CEO Thomas A. James.
“The final quarter capped an excellent 2006 fiscal year. Annual net revenues and net income both achieved new records, up 15 percent and 42 percent, respectively. Driven by an increase of 20 percent in client assets to $182 billion over the year, material improvements in financial advisor productivity and lower legal costs, the contribution of the private client group grew by 65 percent. Asset management’s contribution also increased by almost 20 percent. Although Raymond James Bank’s contribution only grew by 13 percent, its profits didn’t fully reflect the dramatic increase in its earnings power, which was obfuscated by the large additions to loan loss reserves related to the $1.3 billion net increase in the loan portfolio.
“Given the recent new record set by the Dow Jones Industrial Average, continuing favorable recruiting results in our private client group, and higher levels of both assets under management and interest earning assets, the indications for 2007 are that growth will continue.”
The company will conduct its quarterly conference call Oct. 26 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 4,700 financial advisors serving approximately 1.5 million accounts in 1,624 locations throughout the United States, Canada and overseas. In addition, total client assets are currently over $182 billion, of which approximately $31.8 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.
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Raymond James Financial, Inc.
Unaudited Report
For the periods ended September 30
all data in thousands, except per share earnings) |
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Fourth Quarter |
Fiscal Year |
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2006 |
2005 |
% Change |
2006 |
2005 |
% Change |
Gross revenues |
$ 689,235 |
$ 593,931 |
16% |
$2,632,757 |
$2,156,997 |
22% |
Net revenues |
587,081 |
563,561 |
4% |
2,336,087 |
2,039,208 |
15% |
Net income |
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Net income per share - diluted |
$ 0.44 |
$ 0.39 |
13% |
$ 1.85 |
$ 1.33 |
39% |
Average shares outstanding – diluted |
117,072 |
113,769 |
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115,738 |
113,048 |
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Balance Sheet Data |
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September 2006 |
September 2005 |
Total assets |
$ 11.52 bil. |
$ 8.36 bil. |
Shareholders' equity |
$1,464 mil. |
$1,242 mil. |
Book value per share |
$12.83 |
$10.95 |
Management Data |
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Quarter Ended |
YTD |
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September 2006 |
September 2005 |
June 2006 |
September 2006 |
September 2005 |
Total financial advisors: |
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United States |
4,446 |
4,591 |
4,529 |
4,446 |
4,591 |
Canada |
326 |
295 |
323 |
326 |
295 |
# Lead managed/co-managed |
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Corporate Public offerings in U.S. |
22 |
32 |
27 |
97 |
98 |
Corporate Public offerings in Canada |
3 |
5 |
7 |
29 |
20 |
Financial assets under management |
$ 31.8 bil. |
$ 27.5 bil. |
$31.6 bil. |
$ 31.8 bil. |
$ 27.5 bil. |
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September 2006 |
June 2006 |
March 2006 |
September 2005 |
Client Assets |
$ 182 bil. |
$ 169 bil. |
$ 167 bil. |
$ 151 bil. |
Client Margin Balances |
$1,363 mil. |
$1,405 mil. |
$1,335 mil. |
$1,230 mil. |
Year Ended |
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September 30, 2006 |
September 30, 2005 |
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(000's) |
Revenues: |
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Private Client Group |
$ 1,679,813 |
$ 1,397,578 |
Capital Markets |
487,419 |
455,151 |
Asset Management |
200,124 |
171,916 |
RJBank |
114,692 |
45,448 |
Emerging Markets |
55,263 |
38,768 |
Stock Loan/Borrow |
59,947 |
31,876 |
Other |
35,499 |
16,260 |
Total |
$ 2,632,757 |
$ 2,156,997 |
Pre-tax Income: |
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Private Client Group |
$ 168,519 |
$ 102,245 |
Capital Markets |
78,221 |
77,333 |
Asset Management |
48,095 |
40,841 |
RJBank |
16,003 |
14,204 |
Emerging Markets |
2,857 |
5,927 |
Stock Loan/Borrow |
8,001 |
5,962 |
Other |
20,370 |
1,459 |
Pre-tax Income |
$ 342,066 |
$ 247,971 |
Minority Interest |
(8,159) |
(2,518) |
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$ 333,907 |
$ 245,453 |
RAYMOND JAMES FINANCIAL, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF OPERATIONS
(UNAUDITED)
Quarter-to-Date |
(in thousands, except per share earnings) |
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Three Months Ended |
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September 30,
2006 |
September 30,
2005 |
%
Change |
June 30,
2005 |
%
Change |
Revenues: |
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Securities commissions and fees |
$375,425 |
$373,702 |
0% |
424,594 |
(12%) |
Investment banking |
45,953 |
62,730 |
(27%) |
44,075 |
4% |
Investment advisory fees |
46,763 |
42,196 |
11% |
46,371 |
1% |
Interest |
149,449 |
67,400 |
122% |
125,860 |
19% |
Net trading profits |
7,439 |
4,693 |
59% |
5,671 |
31% |
Financial service fees |
29,549 |
21,349 |
38% |
38,288 |
(23%) |
Other |
34,657 |
21,861 |
59% |
26,498 |
31% |
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TOTAL REVENUES |
689,235 |
593,931 |
16% |
711,357 |
(3%) |
Interest Expense |
102,154 |
30,370 |
236% |
81,689 |
25% |
NET REVENUES |
587,081 |
563,561 |
4% |
629,668 |
(7%) |
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Non-Interest Expenses: |
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Compensation, commissions and benefits |
405,549 |
389,342 |
4% |
429,224 |
(6%) |
Communications and information processing |
26,424 |
24,675 |
7% |
25,858 |
2% |
Occupancy and equipment costs |
18,380 |
18,378 |
0% |
18,701 |
(2%) |
Clearance and floor brokerage |
8,722 |
6,049 |
44% |
8,781 |
(1%) |
Business development |
19,971 |
20,500 |
(3%) |
21,782 |
(8%) |
Other |
30,541 |
35,752 |
(15%) |
30,993 |
(1%) |
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TOTAL NON-INTEREST EXPENSES |
509,587 |
494,696 |
3% |
535,339 |
(5%) |
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Income before provision for income taxes |
77,494 |
68,865 |
13% |
94,329 |
(18%) |
Provision for income taxes |
27,991 |
28,837 |
(3%) |
39,728 |
(30%) |
Minority Interest |
(1,425) |
(4,696) |
70% |
(2,173) |
34% |
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Net Income |
$ 50,928 |
$ 44,724 |
14% |
$56,774 |
(10%) |
Net Income per share basic |
$ 0.45 |
$ 0.40 |
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$0.50 |
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Net Income per share diluted |
$ 0.44 |
$ 0.39 |
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$0.48 |
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Weighted average common shares outstanding-basic |
113,812 |
110,918 |
|
113,464 |
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Weighted average common and common equivalent shares outstanding-diluted |
117,072 |
113,769 |
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116,960 |
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RAYMOND JAMES FINANCIAL, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF OPERATIONS
(UNAUDITED)
Year-to-Date |
(in thousands, except per share earnings) |
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Twelve Months Ended |
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September 30,
2006 |
September 30,
2005 |
%
Change |
Revenues: |
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Securities commissions and fees |
$1,561,504 |
$ 1,421,908 |
10% |
Investment banking |
158,598 |
150,166 |
6% |
Investment advisory fees |
179,366 |
157,428 |
14% |
Interest |
469,981 |
245,562 |
91% |
Net trading profits |
27,156 |
24,612 |
10% |
Financial service fees |
115,990 |
86,014 |
35% |
Other |
120,162 |
71,307 |
69% |
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TOTAL REVENUES |
2,632,757 |
2,156,997 |
22% |
Interest Expense |
296,670 |
117,789 |
152% |
NET REVENUES |
2,336,087 |
2,039,208 |
15% |
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Non-Interest Expenses: |
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Compensation, commissions and benefits |
1,601,037 |
1,429,104 |
12% |
Communications and information processing |
103,576 |
91,881 |
13% |
Occupancy and equipment costs |
72,593 |
66,948 |
8% |
Clearance and floor brokerage |
28,329 |
24,063 |
18% |
Business development |
78,579 |
67,802 |
16% |
Other |
118,066 |
113,957 |
4% |
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TOTAL NON-INTEREST EXPENSES |
2,002,180 |
1,793,755 |
12% |
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Income before provision for income taxes |
333,907 |
245,453 |
36% |
Provision for income taxes |
127,724 |
96,925 |
32% |
Minority Interest |
(8,159) |
(2,518) |
(224)% |
Net Income |
$ 214,342 |
$ 151,046 |
42% |
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Net Income per share basic |
$ 1.90 |
$ 1.37 |
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Net Income per share diluted |
$ 1.85 |
$ 1.33 |
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Weighted average common shares outstanding-basic |
112,614 |
110,217 |
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Weighted average common and common equivalent shares outstanding-diluted |
115,738 |
113,048 |
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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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