Lazard profit beats on record advisory, asset management revenue

(Reuters) - Lazard Ltd LAZ.N reported higher-than-expected quarterly profit and revenue on Thursday as it earned more from advising on deals and on strength in its asset management unit.

Operating revenue from financial advisory surged 43 percent and asset management jumped 22.3 percent in the quarter, marking the highest ever quarterly revenue for both businesses.

Lazard pocketed a market share of 10.7 percent, and ranked No. 9, for completed deals among major advisers globally, according to Thomson Reuters data.

“Global M&A activity has declined ... partly due to uncertainty regarding U.S. policy, but the environment remains favorable. Sentiment continues to be constructive among CEOs and boardrooms around the world,” Chief Executive Kenneth Jacobs said on a post-earnings call.

The value of worldwide mergers and acquisitions announced decreased about 6 percent in the quarter.

However, Lazard’s operating revenue from M&A and strategic advisory rose more than 50 percent to $323 million in the second quarter ended June 30.

The company advised on deals such as Johnson & Johnson's JNJ.N $30 billion acquisition of Actelion ATLN.S and Danone's DANO.PA $12.5 billion acquisition of WhiteWave Foods Co.

Lazard has made asset management a bigger part of its business, now accounting for about 43 percent of total revenue.

Total assets under management were $226 billion at the end of June, up 5 percent from the end of March, helped by market gains and foreign exchange movement.

The company also earned 22 percent more from advising on restructuring.

Lazard benefited from increased restructuring in the retail sector, partly spurred by the growth of Amazon AMZN.O and WalMart WMT.N, company executives said on the call.

Net income attributable to Lazard rose to $120.4 million, or 91 cents per share, in the quarter, from $80.4 million, or 61 cents per share, a year earlier.

On an adjusted basis, the company earned 98 cents per share, handily beating the average analyst estimate of 79 cents, according to Thomson Reuters I/B/E/S.

Total operating revenue rose 33 percent to $720.2 million, while analysts had expected $627.1 million.

Lazard’s shares were little changed in morning trading on Thursday. As of Wednesday’s close, stock had risen nearly 20 percent this year.

Reporting by Sruthi Shankar in Bengaluru; Editing by Martina D’Couto