Jefferies earnings boosted by bank’s stake in Knight Capital

City A.M. Reporter
JEFFERIES Group reported higher-than-expected quarterly profit yesterday, with the investment bank’s stake in Knight Capital Group boosting earnings and trading revenue.

Jefferies acquired a 22.8 per cent stake in Knight Capital last month as part of a rescue plan after the market-making firm suffered a trading loss of $440m (£271.6m) due to a software glitch.

New York-based Jefferies posted earnings of $70.2m or 31 cents per share, for the fiscal third quarter ended 31 August, up 2.8 per cent from $68.3m, or 30 cents per share, a year earlier.

Adjusted earnings were 32 cents per share, topping analysts’ average estimate by three cents.

Jefferies said its stake in Knight contributed eight cents to its earnings per share, and $103.3m to principal transactions revenue.

Jefferies’ overall revenue rose 45.1 per cent, largely due to positive income in principal transactions, versus a loss in that trading business a year ago.

Jefferies shares closed down 7.28 per cent at $14.52.