Revenues fall at Jefferies after trade backfires

INVESTMENT bank Jefferies Group said yesterday its quarterly revenue dipped two per cent, hurt by a tough trading environment, but the mid-sized player raised its buyback programme to 20m shares.

Revenue at Jefferies fell to $509.2m (£323.6m), hurt by a loss of $74m from trades the bank made on its own account.

For the quarter ended 31 August, Jefferies posted a profit for common shareholders of $68.2m, compared with $44.8m a year ago.

Much of the profit came from the firm’s nearly $500m purchase of Prudential Bache.

As the first investment bank to report results, Jefferies is often seen as an indicator for others on Wall Street.

“There are no surprises in Jefferies numbers relative to what others are going to produce. You don’t know how bad it’s going to be, all you know is that it’s going to be very bad,” said Richard Bove, analyst with Rochdale Securities.

“The company is going through a substantial expansion programme at a period when the markets are contracting dramatically...if they can’t get their revenue to go up because the markets aren’t going to go up, their earnings are going to be squeezed terribly.”