Jefferies Stock Sinks after Firm Attributes Soft Results Geopolitics

Key Takeaways

• Jefferies missed quarterly earnings and revenue estimates as it faced "challenging" capital market conditions.
• Investment banking and capital markets revenue also decreased. Asset management revenue fell 30% from the previous year.
• Jefferies blamed U.S. geopolitical policies and events for the declines.

Jefferies Financial Group shares (JEF) fell 9% on Thursday, after the financial services company reported worse-than expected results. The firm attributed this to difficult capital market conditions.

The company reported adjusted earnings per common share (EPS) for the first quarter of fiscal 2025 at $0.57. Revenues were down 8% on an annual basis to $1.59 billion. Visible Alpha surveyed analysts, who expected $0.94 per share and $1.88 billion respectively.

Asset management revenue fell 30% to $191.7 millions. Investment banking revenue fell by nearly 4%, to $700,7 million. Capital market revenue also declined by nearly 4%, to $698.3 millions.

'Capital Markets Have Become Increasingly More Challenging,' Execs Say

In the management comments section of the earnings report, CEO Richard Handler and President Brian Friedman blamed the performance on global factors, arguing that "capital markets have become increasingly more challenging due to the uncertainties that have arisen around U.S. policy and geopolitical events."

However, Handler and Friedman said they remain confident in the company's strategy. "We will navigate this period of uncertainty the way we always do, by focusing on our clients and helping them address their challenges and opportunities, while watching our risk, maintaining record liquidity and striving to gain market share across our firm," they wrote.

Even with today's losses, shares of Jefferies Financial Group have added about 20% of their value over the past year.