By Rebecca Ungarino

Jefferies Financial Group reported on Wednesday that its earnings surged more than 200% in the fourth quarter of 2024 from a year prior, an indication that the dealmaking environment has improved.

The investment bank's profit rose by some 212% to $205.7 million from $65.6 million a year earlier, while revenue jumped 63% to $1.96 billion. Quarterly earnings per share were 91 cents.

Per-share earnings and earnings fell short of the 97 cents and $245 million, respectively, that analysts surveyed by FactSet had expected. Quarterly revenue surpassed analysts' forecast of $1.8 billion.

Strong performances in the investment banking business -- quarterly revenue of $596.7 million from advisory work for clients marked a record -- drove the stronger results, Jefferies said. Overall investment banking revenue totaled $3.4 billion in 2024, the bank's second-highest annual figure.

The New York-based bank "begins 2025 in the best position ever in our firm's sixty-two-year history," Jefferies Chief Executive Richard Handler and Brian Friedman, the firm's president, wrote in their annual letter to shareholders on Wednesday. Revenue of some $2.8 billion from capital markets in 2024 was up 24% from a year earlier.

The stock scored brief gains but then slipped back to near its closing level in after-hours trading.

Through the close of trading, the stock had jumped 97% in the past year and set an record intraday high on Monday. The S&P 500 is up 24% in that time. The firm said on Wednesday that it was increasing its quarterly dividend by about 14% to 40 cents per share.

Jefferies typically releases results earlier than banks such as JPMorgan Chase and Goldman Sachs, offering both a window into how its larger rivals might fare and a pulse check on the industry's health. Jefferies's results on Wednesday marked a turnaround from a notably soft quarter a year ago. Profits at the end of 2023 fell by roughly half from the year prior.

Investors and analysts are watching for how banks' hauls from investment banking assignments fare as dealmaking has started to return. Following a period of ultralow borrowing costs and a banner run for investment bankers, higher interest rates had prompted a downturn for initial public offerings, mergers, and acquisitions.

To the benefit of Wall Street, the environment is now better for companies that want to make big deals. The Federal Reserve has been on a path to lower rates and the economy has remained on a strong footing. Finance executives are predicting a wave of new dealmaking in 2025, anticipating a friendlier approach from regulators on antitrust issues that can set back or kill mergers.

Write to Rebecca Ungarino at rebecca.ungarino@barrons.com

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(END) Dow Jones Newswires

January 08, 2025 16:43 ET (21:43 GMT)

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