Lazard profit falls but beats forecasts

FINANCIAL adviser and asset manager Lazard yesterday reported higher-than-expected second-quarter earnings, helped by strength in its restructuring business, sending its shares higher.<br /><br />But the firm said that profit was lower than a year earlier as its mergers and acquisitions business had not fully recovered in a lacklustre market.<br /><br />Lazard vice chairman Steven Golub said that he expects a &ldquo;gradual rebound&rdquo; in the M&amp;A market, but was optimistic about the gains in its restructuring operations, and increased its quarterly dividend by 25 per cent to 12.5 cents (7.6p) per share.<br /><br />Second-quarter revenue fell 20 per cent to $402.5m (&pound;245.8m), while net income attributable to Lazard shareholders fell to $43.1m, or 34 cents per share, from $64.6m, or 54 cents a share, a year earlier. The results were well above the analysts&rsquo; average expectation of 13 cents per share.<br /><br />Second-quarter operating revenue in the restructuring business nearly tripled from a year ago to a record $93.2m.<br /><br />Operating revenue fell 40 per cent in the M&amp;A business to $134.9m, although the division showed signs it was bouncing back from the first quarter, when it booked operating revenue of $96.4m.<br /><br />Fox-Pitt Kelton analyst David Trone called this a &ldquo;strong rebound&rdquo;, and said that the poor first-quarter M&amp;A results appeared to be an &ldquo;anomaly&rdquo;.<br /><br />Lazard chief executive Bruce Wasserstein later told analysts that he believed it will take about four years for traditional M&amp;A to return to earlier highs.<br /><br />Wasserstein said he was encouraged by the growing number of advising opportunities in a list of countries including China, India, Brazil, Australia, and Russia.<br /><br />Management fees rose 15 per cent from the first quarter, while assets under management rose to $98bn from $81bn in the first quarter, but were still down from year-earlier levels of $134bn.