Raymond James Financial net income ($49 million) fell by 22 percent in its fiscal fourth quarter, ended September 30. Revenue in the quarter was off by 9 percent. For the full fiscal year, net income was off by 6 percent on a 3 percent drop in revenue. (For full release, click here; a company conference call will be held on Wednesday, October 22 at 8:15 a.m.)
“Although that might be disappointing to analysts, I’m actually pleased that our results were that good in light of the devastation of the financial sector,” said James. He also said the company avoided sub-prime mortgages, credit default swaps and high-leverage.
The company results were largely affected by a higher tax rate and, of course, the inhospitable stock market—which affected about every business line, except its thrift, RJBank, which performed great. CEO Tom James blamed reduced retail client activity and reduced asset-based fees. “Initial public offerings and other new issue activity has largely disappeared,” he said in a statement. Trading results were awful (posting a $6.9 million loss in Q4); and, investment banking revenue was off by 39 percent. And, like many others, its credit line was negatively affected because of the credit crisis (it was reduced by half to $100 million). “Fortunately, we have sufficient funding and are in the process of obtaining additional lines currently,” James said. Additional funds could be used for acquisitions and to recruit more financial advisors, the release stated.
The number of advisors in the U.S. increased to 4,548, up from 4,336 in Q4 last year. “Traumatic times test a company’s strategic business plan, and the quality and soundness of its operational platform,” James said. He added, “In fact, our recruiting activity has never been more active and opportunities abound for an organization that is well-capitalized and well-run.”