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Raymond James Ends Year on Record Highs, But Misses Quarterly Expectations

Raymond James Ends Year on Record Highs, But Misses Quarterly Expectations

Raymond James Financial saw a slight dip in its fourth quarter performance, but overall, the Florida-based broker/dealer hit record revenues and profits for the year with an eye toward future growth.

For the fourth quarter, Raymond James reported record net revenues of $1.34 billion, up 4 percent over the prior year’s fiscal fourth quarter and 2 percent sequentially. The firm’s quarterly net income hit $129.2 million, or $0.88 per diluted share, missing analysts’ estimates by $0.04, according to Seeking Alpha.  The $129.2 million in net income was down 5 percent compared to the record set in 2014 and 3 percent compared to the third quarter.

The firm ended its fiscal year on Sept. 30 with record net revenue of $5.2 billion and record pre-tax income of $798.2 million, both up 7 percent from fiscal 2014.

Raymond James also fueled speculation regarding a reported deal to purchase Deutsche Bank, which would bring in about 250 new advisors to the firm. CEO Paul Reilly hinted at Raymond James’ expansion plans going forward in a statement released with the earnings.

“We remain committed to expanding the asset management segment’s product offering, both organically and through acquisitions,” Reilly said. “Continued private client group recruiting momentum also bodes well for growth in this segment.”

When pressed to confirm the potential deal during Thursday’s analyst call, Reilly demurred, saying “we never talk to rumors about us,” referring to recent reports in the press

Here are the highlights:

  • The Private Client Group reported record quarterly net revenues of $899.9 million, up 4 percent compared to the prior year and up 1 percent sequentially.
  • Pre-tax income was $87.7 million for the fourth quarter, down 12 percent compared to the record set in the prior year’s fiscal fourth quarter but up 2 percent compared to the preceding quarter.
  • For the year, the wealth business hit record annual net revenues of $3.51 billion and record annual pre-tax income of $342.2 million.
  • Private Client Group assets under administration for the quarter were $453.3 billion, up 1 percent compared to the prior year, but down 5 percent sequentially. Reilly said Thursday the slight downturn was due to the decline in equity markets.
  • The year was also the firm's second best for financial advisor recruiting, with Raymond James gaining 89 advisors during the quarter for a total of 6,596 advisors at the end of the fourth quarter.  
  • Raymond James & Associates (employee channel) had 2,571 advisors and Raymond James Financial Services (independent channel) had 3,544 advisors.
  • Reilly said recruitment at the firm continued to be “very vibrant,” noting the firm overall gained 331 advisors over the past year, adding he believes growth will continue to be good going forward.
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