By Trevor Hunnicutt
July 24 Brokerage and investment bank Raymond James Financial Inc said on Wednesday its quarterly profit rose 10 percent from last year, driven by growth in asset management revenues.
The St. Petersburg, Florida-based company reported net income of $83.9 million, or 59 cents a share, in its fiscal third quarter ended June 30, up from $76.4 million, or 55 cents a share, a year ago.
Excluding one-time acquisition related expenses, Raymond James earned $92.5 million, or 65 cents a share, falling slightly below analysts' expectations of 66 cents a share, according to Thomson Reuters I/B/E/S.
Net revenue rose 2 percent to $1.11 billion from a year earlier, meeting analysts' expectations.
Raymond James' U.S. adviser headcount was relatively flat during the quarter at a total 5,428 advisers at the end of June, down 3 from the prior quarter. Including the UK, Canada and its custody businesses, Raymond James had 6,301 advisers and representatives at the end of June.
"It was an extremely difficult quarter for fixed income as upward trending volatility in long-term interest rates led to low commission volumes and a net trading loss," Chief Executive Paul Reilly said in a statement.
In May and June, the bond market suffered its worst two-month period in a decade as prices for 10-year U.S. Treasury notes tumbled amid expectations that the U.S. Federal Reserve would begin to taper its $85 billion in monthly bond purchases as the U.S. economy improves. Rising yields on long-term municipal bonds rivaled those of October 2008, Raymond James said.
Raymond James' capital markets revenue for the quarter fell 15 percent from last year to $218 million at the end of June.
Total client assets increased 9 percent to $405.8 billion from the prior year, including roughly $18 billion in institutional assets. Brokerage revenue rose 8 percent.
Reilly said Raymond James is "substantially complete" with their integration of Memphis-based brokerage Morgan Keegan, which the company acquired last April for $1.2 billion from Regions Financial Corp.