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Press Release
Release No. 1007-02
Oct. 23, 2007
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 24 percent increase in unaudited net income to $62,967,000, or $0.53 per diluted share, for the fourth quarter ended Sept. 30, 2007, on net revenues of $691,636,000, compared to net income of $50,928,000, or $0.44 per diluted share, for fiscal 2006’s fourth quarter.
Unaudited net income for the 12 months of fiscal 2007 was reported at a record $250,430,000, up from 2006’s $214,342,000, while net revenues increased to a record $2,609,915,000 from $2,348,908,000 the previous year. Diluted earnings per share were $2.11 versus $1.85 for the prior year.
“From the perspective of the 20th anniversary of Black Monday, against the economic landscape of $90 oil, a sub-prime crisis and an apparently weakening U.S. economy, it’s my pleasure to elaborate on an excellent fourth fiscal quarter, capping a very good fiscal year ended in September. Quarterly gross and net revenues of $839 million and $692 million, respectively, exceeded last year by 21 percent and 17 percent, while paralleling the preceding quarter closely. Although net income trails last quarter’s record by 8 percent, it exceeded last year’s comparable quarter by 24 percent, at $63 million,” stated Chairman and CEO Thomas A. James.
“Quarterly net income benefited from a lower than normal tax rate, but the annual rate was 35 basis points below our projection of 36.5 percent. On the other side of the ledger, as predicted in last month’s release, net income was adversely impacted by poor trading results related to the sub-prime crisis, and by the large addition to the allowance for loan losses at Raymond James Bank arising from the extraordinary level of attractive loan purchases in the fourth quarter. Those reserves exceeded recent levels of additions by $9 to $12 million and reduced reported pre-tax profits accordingly. Raymond James is not in the sub-prime mortgage business and actual losses from bad loans continue to be very small.
“The Private Client group continued to drive profitability as the quarter’s commissions and fees increased 22 percent from last year. Investment Banking revenues were also up 32 percent, resulting from vibrant merger and acquisition activity. Net interest remains the major contributor to pre-tax profits, representing 68 percent of the total, up 37 percent from last year,” he continued.
“Annual results set new records with gross revenues crossing $3 billion for the first time at $3.1 billion and net revenues at $2.6 billion, up 18 percent and 11 percent, respectively, from last year. Net income of $250 million reflected an increase of 17 percent over last year. Diluted earnings per share were $2.11, up 14 percent from $1.85 last year.
“While all operations are performing well and expected to generate attractive growth long term, the risks in the market have increased, attributable to the unexpectedly favorable results in the stock market in spite of the unpropitious economic conditions mentioned earlier.”
The company will conduct its quarterly conference call Wednesday, Oct. 24, at 4:15 p.m. EDT. The telephone number is 877-777-1972. The call will also be available on demand on the company’s Website, raymondjames.com, under “About Our Company,” “Investor Relations,” “Financial Reports,” “Quarterly Analyst Conference Call.” 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.) and Raymond James Investment Services Limited, a majority-owned independent contractor subsidiary in the United Kingdom, have a total of more than 4,750 financial advisors serving approximately 1.6 million accounts in 2,200 locations throughout the United States, Canada and overseas. In addition, total client assets are currently near $215 billion, of which approximately $37.1 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’ 2006 annual report on Form 10-K and quarterly reports for the quarters ended December 31, 2006, March 31, 2007, and June 30, 2007, on Form 10-Q, which are available on raymondjames.com and sec.gov.
Raymond James Financial, Inc.
Unaudited Report
For the periods ended September 30
(all data in thousands, except per share earnings) |
| |
Fourth Quarter |
Fiscal Year |
| |
2007 |
2006 |
% Change |
2007 |
2006 |
% Change |
Gross revenues |
$838,926 |
$692,493 |
21% |
$3,109,579 |
$2,645,578 |
18% |
Net revenues |
691,636 |
590,339 |
17% |
2,609,915 |
2,348,908 |
11% |
Net income |
62,967 |
50,928 |
24% |
250,430 |
214,342 |
17% |
Net income per share – diluted |
$ 0.53 |
$ 0.44 |
20% |
$ 2.11 |
$ 1.85 |
14% |
Weighted average common and common
equivalent shares outstanding – diluted |
119,743 |
117,072 |
|
118,693 |
115,738 |
|
| |
Balance Sheet Data |
| |
September
2007 |
September
2006 |
Total assets |
$ 16.2 bil. |
$ 11.5 bil. |
Shareholders' equity |
$1,758 mil. |
$1,464 mil. |
Book value per share |
$15.07 |
$12.83 |
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Management Data |
| |
Quarter Ended |
YTD |
| |
September 2007 |
September 2006 |
June 2007 |
September 2007 |
September 2006 |
Total financial advisors: |
|
|
|
|
|
United States |
4,336 |
4,446 |
4,307 |
4,336 |
4,446 |
Canada |
341 |
326 |
341 |
341 |
326 |
United Kingdom |
81 |
71 |
76 |
81 |
71 |
# Lead managed/co-managed: |
|
|
|
|
|
Corporate public offerings in U.S. |
9 |
22 |
22 |
78 |
97 |
Corporate public offerings in Canada |
6 |
3 |
14 |
30 |
29 |
Financial assets under management |
$ 37.1 bil. |
$ 31.8 bil. |
$36.1 bil. |
$ 37.1 bil. |
$ 31.8 bil. |
| |
September 2007 |
June 2007 |
March 2007 |
September 2006 |
Client Assets |
$ 215 bil. |
$ 207 bil. |
$ 198 bil. |
$ 182 bil. |
Client Margin Balances |
$1,526 mil. |
$1,441 mil. |
$1,408 mil. |
$1,363 mil. |
| |
Quarter Ended |
Year Ended |
| |
September 30, 2007 |
September 30, 2006 |
September 30, 2007 |
September 30, 2006 |
| |
(in 000’s) |
Revenues: |
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|
|
|
Private Client Group |
$ 516,330 |
$ 428,541 |
$ 1,938,154 |
$ 1,679,813 |
Capital Markets |
132,990 |
125,623 |
506,498 |
487,419 |
Asset Management |
61,223 |
53,818 |
234,875 |
207,821 |
RJBank |
93,572 |
45,717 |
279,572 |
114,692 |
Emerging Markets |
15,957 |
11,903 |
59,083 |
55,263 |
Stock Loan/Borrow |
19,401 |
17,342 |
68,685 |
59,947 |
Private Equity |
(3,637) |
8,370 |
8,280 |
17,312 |
Other |
3,090 |
1,179 |
14,432 |
23,311 |
Total |
$ 838,926 |
$ 692,493 |
$ 3,109,579 |
$ 2,645,578 |
Income Before Provision for Income Taxes: |
|
|
|
|
Private Client Group |
$ 58,337 |
$ 38,931 |
$ 219,864 |
$ 168,519 |
Capital Markets |
15,944 |
20,657 |
68,966 |
78,221 |
Asset Management |
13,997 |
13,460 |
60,517 |
48,749 |
RJBank |
2,043 |
5,945 |
27,005 |
16,003 |
Emerging Markets |
1,966 |
(4,536) |
3,640 |
2,857 |
Stock Loan/Borrow |
2,008 |
1,031 |
5,003 |
8,001 |
Private Equity |
(1,040) |
2,735 |
3,577 |
8,468 |
Other |
2,350 |
696 |
3,652 |
11,248 |
Pre- Tax Income |
$ 95,605 |
$ 78,919 |
$ 392,224 |
$ 342,066 |
RAYMOND JAMES FINANCIAL, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF INCOME
(unaudited)
Quarter-to-Date
(in thousands, except per share amounts) |
| |
Three Months Ended |
| |
Sept. 30, 2007 |
Sept. 30, 2006 |
% Change |
June 30, 2007 |
% Change |
Revenues: |
|
|
|
|
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Securities commissions and fees |
$ 459,513 |
$375,425 |
22% |
$ 462,047 |
(1%) |
Investment banking |
60,432 |
45,953 |
32% |
51,818 |
17% |
Investment advisory fees |
53,589 |
46,763 |
15% |
51,754 |
4% |
Interest |
212,265 |
149,449 |
42% |
191,691 |
11% |
Net trading profits |
42 |
7,439 |
(99%) |
7,050 |
(99%) |
Financial service fees |
33,531 |
32,807 |
2% |
30,285 |
11% |
Other |
19,554 |
34,657 |
(44%) |
28,108 |
(30%) |
| |
|
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|
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Total Revenues |
838,926 |
692,493 |
21% |
822,753 |
2% |
Interest Expense |
147,290 |
102,154 |
44% |
134,093 |
10% |
Net Revenues |
691,636 |
590,339 |
17% |
688,660 |
0% |
| |
|
|
|
|
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Non-Interest Expenses: |
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|
|
|
|
Compensation, commissions and benefits |
466,828 |
405,549 |
15% |
462,459 |
1% |
Communications and information processing |
31,081 |
26,424 |
18% |
28,828 |
8% |
Occupancy and equipment costs |
20,032 |
18,380 |
9% |
19,983 |
0% |
Clearance and floor brokerage |
8,084 |
8,722 |
(7%) |
8,180 |
(1%) |
Business development |
21,815 |
19,971 |
9% |
22,416 |
(3%) |
Investment advisory fees |
12,837 |
10,500 |
22% |
12,111 |
6% |
Other |
39,735 |
23,299 |
71% |
29,156 |
36% |
Total Non-Interest Expenses |
600,412 |
512,845 |
17% |
583,133 |
3% |
Income before minority interest and
provision for income taxes |
91,224 |
77,494 |
18% |
105,527 |
(14%) |
| |
|
|
|
|
|
Minority Interest |
(4,381) |
(1,425) |
(207%) |
(4,371) |
0% |
| |
|
|
|
|
|
Income before provision for income taxes |
95,605 |
78,919 |
21% |
109,898 |
(13%) |
| |
|
|
|
|
|
Provision for income taxes |
32,638 |
27,991 |
17% |
41,545 |
(21%) |
Net Income |
$ 62,967 |
$ 50,928 |
24% |
$ 68,353 |
(8%) |
Net Income per share-basic |
$ 0.54 |
$ 0.45 |
20% |
$ 0.59 |
(8%) |
Net Income per share-diluted |
$ 0.53 |
$ 0.44 |
20% |
$ 0.57 |
(7%) |
Weighted average common shares outstanding-basic |
116,440 |
113,812 |
|
116,135 |
|
Weighted average common and common equivalent shares outstanding-diluted |
119,743 |
117,072 |
|
119,140 |
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RAYMOND JAMES FINANCIAL, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF INCOME
(UNAUDITED)
Year-to-Date
(in thousands, except per share amounts) |
| |
Twelve Months Ended |
| |
September 30, 2007 |
September 30, 2006 |
% Change |
Revenues: |
|
|
|
Securities commissions and fees |
$ 1,740,717 |
$1,561,504 |
11% |
Investment banking |
192,114 |
158,598 |
21% |
Investment advisory fees |
206,076 |
179,366 |
15% |
Interest |
726,992 |
469,981 |
55% |
Net trading profits |
16,476 |
27,156 |
(39%) |
Financial service fees |
125,214 |
128,811 |
(3%) |
Other |
101,990 |
120,162 |
(15%) |
| |
|
|
|
Total Revenues |
3,109,579 |
2,645,578 |
18% |
| |
|
|
|
Interest Expense |
499,664 |
296,670 |
68% |
Net Revenues |
2,609,915 |
2,348,908 |
11% |
| |
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|
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Non-Interest Expenses: |
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|
|
Compensation, commissions and benefits |
1,766,690 |
1,601,037 |
10% |
Communications and information processing |
114,161 |
103,576 |
10% |
Occupancy and equipment costs |
79,881 |
72,593 |
10% |
Clearance and floor brokerage |
30,746 |
28,329 |
9% |
Business development |
88,067 |
78,579 |
12% |
Investment advisory fees |
47,452 |
40,524 |
17% |
Other |
100,421 |
90,363 |
11% |
Total Non-Interest Expenses |
2,227,418 |
2,015,001 |
11% |
| |
|
|
|
Income before minority interest and
provision for income taxes |
382,497 |
333,907 |
15% |
| |
|
|
|
Minority Interest |
(9,727) |
(8,159) |
(19%) |
| |
|
|
|
Income before provision for income taxes |
392,224 |
342,066 |
15% |
| |
|
|
|
Provision for income taxes |
141,794 |
127,724 |
11% |
Net Income |
$ 250,430 |
$ 214,342 |
17% |
Net Income per share-basic |
$ 2.17 |
$ 1.90 |
14% |
Net Income per share-diluted |
$ 2.11 |
$ 1.85 |
14% |
Weighted average common shares
outstanding-basic |
115,608 |
112,614 |
|
Weighted average common and common
equivalent shares outstanding-diluted |
118,693 |
115,738 |
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– 30 –
For more information, contact Tracey Bustamante at 727-567-2824.
Please visit the Raymond James Press Center at raymondjames.com/media.
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