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Press Release
Release No. 0406-03
April 26, 2006
Printable version (PDF)
RAYMOND JAMES FINANCIAL, INC.
ANNOUNCES SECOND QUARTER RESULTS;
REPORTS RECORD REVENUE AND NET INCOME
ST. PETERSBURG, Fla. – Raymond James Financial, Inc. today reported a 77 percent increase in unaudited net income to a new record $61,531,000, or $0.53 per diluted share, for the second quarter ended March 31, 2006. In comparison, the firm reported net income of $34,697,000, or $0.30 per diluted share, for fiscal 2005’s second quarter. Net revenues surged 23% to $592,802,000.
Unaudited net income for the first half of fiscal 2006 was reported at $106,640,000, up 44% from 2005’s $73,940,000, while net revenues for the period increased 14% to $1,119,338,000 from $982,103,000 the previous year. Diluted earnings per share were $0.93, up from $0.65 for last year’s comparable period.
“Before one concludes that the quarter was a blockbuster, you should be aware that $10.3 million ($0.09 per diluted share) of the quarterly net income related to the sale of three seats on the NYSE and one seat on the Montreal Exchange for stock and cash, when those two exchanges converted to public ownership,” stated Chairman and CEO Thomas A. James.
“As a result, earnings from normal operations were $51.2 million ($0.44 per diluted share) for the quarter and $96.3 million ($0.84 per diluted share) for the first half. Adjusted net income increased 48% and 30%, respectively, over the same periods last year.”
James continued, “Robust growth in Private Client Group commissions and fees as well as meaningful contributions from Capital Markets and Asset Management drove the improvement. Raymond James Bank grew revenues dramatically but earnings didn’t reflect that growth only because the large net addition to the loan portfolio required a substantial increase to the loan loss reserves, not related to any current actual loss experience. As interest rates continued to rise, our quarterly net interest earnings grew by 51% from the comparable quarter last year to $42,606,000.
“The annualized ROE for the quarter was 18.25%, or 15.2% after excluding earnings from seat sales.
“Given the continuation of corporate earnings growth, the probable impending interruption of increases in short-term rates in the not-too-distant future and the economy’s apparent ability to cope with the new spike in oil prices, I don’t anticipate an imminent change in current business trends.”
The company will conduct its quarterly conference call April 27 at 4:15 p.m. EST. The telephone number is 800-773-5520. The call will also be available on demand on the company’s Website, raymondjames.com, under “About Raymond James Financial,” “Financial Reports.” 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., have more than 4,800 financial advisors serving approximately 1.4 million accounts in 2,200 locations throughout the United States, Canada and overseas. In addition, total client assets are currently over $167 billion, of which approximately $31 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’ 2005 annual report on Form 10-K, which is available on raymondjames.com and sec.gov.
– 30 –
For more information, please contact Tracey Bustamante at 727-567-2824.
Please visit the Raymond James Press Center at raymondjames.com/media.
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Raymond James Financial, Inc.
Unaudited Report
For the second quarter ended March 31, 2006
(all data in thousands, except per share earnings) |
| |
Second Quarter |
Six Months |
| |
2006 |
2005 |
Percent
Change |
2006 |
2005 |
Percent
Change |
Gross revenues |
$656,818 |
$512,327 |
28% |
$1,232,165 |
$1,036,704 |
19% |
Net revenues |
592,802 |
483,118 |
23% |
1,119,338 |
982,103 |
14% |
Net income |
61,531 |
34,697 |
77% |
106,640 |
73,940 |
44% |
Earnings per share – diluted |
0.53 |
0.30 |
77% |
0.93 |
0.65 |
43% |
Weighted average common and common equivalent shares outstanding - diluted |
116,412 |
114,458 |
|
115,046 |
113,433 |
|
Balance Sheet Data |
| |
March
2006 |
Dec.
2005 |
Sept.
2005 |
March
2005 |
Total assets |
$10.1 bil. |
$ 9.1 bil. |
$ 8.4 bil. |
$7.9 bil. |
Shareholders' equity |
$1,380 mil. |
$1,316 mil. |
$1,242 mil. |
$1,160 mil. |
Book value per share |
$11.88 |
$11.41 |
$10.95 |
$10.30 |
Management Data |
| |
Quarter Ended |
| |
March
2006 |
Dec.
2005 |
Sept.
2005 |
March
2005 |
Total financial advisors: |
|
|
|
|
United States |
4,544 |
4,544 |
4,591 |
4,806 |
Canada |
314 |
311 |
295 |
279 |
# Lead managed/co-managed
Corporate public offerings in U.S. |
21 |
27 |
32 |
20 |
Corporate public offerings in Canada |
5 |
14 |
5 |
4 |
Financial assets under management |
$31.2 bil. |
$ 28.1 bil. |
$ 27.5 bil. |
$25.4 bil. |
Client Assets |
$167 bil. |
$156 bil. |
$151 bil. |
$136 bil. |
Client Margin Balances |
$1,335 mil. |
$1,293 mil. |
$1,230 mil. |
$1,190 mil. |
| |
Three Months Ended |
Six Months Ended |
| |
March 31,
2006 |
March 24,
2005 |
March 31,
2006 |
March 24,
2005 |
Revenues: |
|
|
|
|
Private Client Group |
$416,905 |
$338,520 |
$792,650 |
$678,468 |
Capital Markets |
122,188 |
106,805 |
228,792 |
223,824 |
Asset Management |
48,125 |
42,017 |
95,075 |
81,972 |
RJBank |
22,664 |
9,820 |
40,518 |
18,803 |
Emerging Markets |
12,040 |
10,098 |
25,849 |
19,308 |
Stock Loan/ Borrow |
14,139 |
5,764 |
25,755 |
12,589 |
Other |
20,757 |
(697) |
23,526 |
1,740 |
Total |
$ 656,818 |
$512,327 |
$1,232,165 |
$1,036,704 |
Pre-tax Income: |
|
|
|
|
Private Client Group |
$38,531 |
$32,862 |
$75,342 |
$ 63,645 |
Capital Markets |
22,085 |
12,985 |
36,660 |
30,294 |
Asset Management |
11,103 |
10,432 |
22,117 |
18,815 |
RJBank |
2,225 |
2,826 |
5,426 |
6,078 |
Emerging Markets |
1,353 |
1,692 |
3,563 |
2,738 |
Stock Loan/ Borrow |
2,324 |
1,289 |
4,548 |
2,335 |
Other |
17,689 |
(3,957) |
18,989 |
(971) |
Pre-tax Income |
95,310 |
58,129 |
166,645 |
122,934 |
Minority Interest |
(4,046) |
(3,620) |
(4,561) |
(2,031) |
Total |
$91,264 |
$54,509 |
$162,084 |
$120,903 |
RAYMOND JAMES FINANCIAL, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF OPERATIONS
UNAUDITED)
Quarter-to-Date |
(in thousands, except per share amounts) |
|
|
|
|
|
| |
Three Months Ended |
| |
March 31,
2006 |
March 24,
2005 |
%
Change |
Dec. 31,
2005 |
%
Change |
Revenues: |
|
|
|
|
|
Securities commissions and fees |
$395,009 |
$341,373 |
16% |
$366,476 |
8% |
Investment banking |
38,856 |
28,387 |
37% |
29,714 |
31% |
Investment advisory fees |
43,486 |
39,106 |
11% |
42,746 |
2% |
Interest |
106,622 |
57,392 |
86% |
88,050 |
21% |
Net trading profits |
8,189 |
7,445 |
10% |
5,857 |
40% |
Financial service fees |
25,101 |
21,748 |
15% |
23,052 |
9% |
Other |
39,555 |
16,876 |
134% |
19,452 |
103% |
TOTAL REVENUES |
656,818 |
512,327 |
28% |
575,347 |
14% |
| |
|
|
|
|
|
Interest Expense |
64,016 |
29,209 |
119% |
48,811 |
31% |
NET REVENUES |
592,802 |
483,118 |
23% |
526,536 |
13% |
| |
|
|
|
|
|
Non-Interest Expenses |
|
|
|
|
|
Compensation, commissions and benefits |
399,645 |
342,492 |
17% |
366,619 |
9% |
Communications and information processing |
26,698 |
22,059 |
21% |
24,596 |
9% |
Occupancy and equipment costs |
18,110 |
15,822 |
14% |
17,402 |
4% |
Clearance and floor brokerage |
5,060 |
5,779 |
-12% |
5,766 |
-12% |
Business development |
19,695 |
15,501 |
27% |
17,131 |
15% |
Other |
32,330 |
26,956 |
20% |
24,202 |
34% |
TOTAL NON-INTEREST EXPENSES |
501,538 |
428,609 |
17% |
455,716 |
10% |
| |
|
|
|
|
|
Income before provision for income taxes |
91,264 |
54,509 |
67% |
70,820 |
29% |
Provision for income taxes |
33,779 |
23,432 |
44% |
26,226 |
29% |
Minority Interest |
(4,046) |
(3,620) |
12% |
(515) |
686% |
Net Income |
$61,531 |
$34,697 |
77% |
$45,109 |
36% |
Net Income per share basic |
$0.54 |
$0.31 |
74% |
$0.41 |
32% |
Net Income per share diluted |
$0.53 |
$0.30 |
77% |
$0.40 |
33% |
Weighted average common shares outstanding - basic |
113,194 |
112,311 |
|
111,501 |
|
Weighted average common and common equivalent shares outstanding - diluted |
116,412 |
114,458 |
|
113,636 |
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RAYMOND JAMES FINANCIAL, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF OPERATIONS
(UNAUDITED)
Year-to-Date |
(in thousands, except per share amounts) |
|
|
|
| |
Six Months Ended |
| |
March 31,
2006 |
March 24,
2005 |
%
Change |
Revenues: |
|
|
|
Securities commissions and fees |
$761,485 |
$698,842 |
9% |
Investment banking |
68,570 |
56,892 |
21% |
Investment advisory fees |
86,232 |
76,558 |
13% |
Interest |
194,672 |
111,808 |
74% |
Net trading profits |
14,046 |
17,197 |
-18% |
Financial service fees |
48,153 |
44,158 |
9% |
Other |
59,007 |
31,249 |
89% |
TOTAL REVENUES |
1,232,165 |
1,036,704 |
19% |
| |
|
|
|
Interest Expense |
112,827 |
54,601 |
107% |
NET REVENUES |
1,119,338 |
982,103 |
14% |
| |
|
|
|
Non-Interest Expenses: |
|
|
|
Compensation, commissions and benefits |
766,264 |
691,401 |
11% |
Communications and information processing |
51,294 |
43,258 |
19% |
Occupancy and equipment costs |
35,512 |
31,875 |
11% |
Clearance and floor brokerage |
10,826 |
11,245 |
-4% |
Business development |
36,826 |
30,245 |
22% |
Other |
56,532 |
53,176 |
6% |
TOTAL NON-INTEREST EXPENSES |
957,254 |
861,200 |
11% |
| |
|
|
|
Income before provision for income taxes |
162,084 |
120,903 |
34% |
Provision for income taxes |
60,005 |
48,994 |
22% |
Minority Interest |
(4,561) |
(2,031) |
125% |
Net Income |
$ 106,640 |
$73,940 |
44% |
Net Income per share basic |
$0.95 |
$0.66 |
44% |
Net Income per share diluted |
$0.93 |
$0.65 |
43% |
Weighted average common shares outstanding-basic |
112,053 |
111,359 |
|
Weighted average common and common equivalent shares outstanding-diluted |
115,046 |
113,433 |
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