Lazard profit beats estimates on robust financial advisory revenue
2022.04.28 15:23
FILE PHOTO: The logo and trading information for Lazard Ltd appear on a screen on the floor at the New York Stock Exchange (NYSE) in New York, U.S., April 24, 2019. REUTERS/Brendan McDermid/File Photo
(Reuters) -Investment bank Lazard (NYSE:LAZ) Ltd sailed past Wall Street estimates for quarterly profit on Thursday, driven by higher fees from financial advisory that cushioned the blow from lower asset management.
Lazard, one of the world’s top 10 M&A advisers, reported adjusted net income of $115 million, or $1.05 per share, for the first quarter, compared with $101 million, or 87 cents per share, a year earlier.
Analysts on average had estimated a profit of 88 cents per share, according to IBES data from Refinitiv.
The company’s profit was also boosted by a string of high-profile mergers and acquisitions that it advised on in the first quarter, such as M&T Bank Corp (NYSE:MTB)’s $7.6 billion takeover of People’s United Financial and Prudential Financial (NYSE:PRU)’s $3.55 billion sale of its full-service retirement business.
Lazard’s robust performance in financial advisory bucks the trend of Wall Street investment banks JPMorgan Chase & Co (NYSE:JPM) and Goldman Sachs (NYSE:GS) which reported a sharp plunge in profits as dealmaking dried up.
The U.S. investment bank is better poised to weather a sharp pullback in M&A due to its large restructuring practice, Lazard said, adding that it has worked on several recent bankruptcies in oil companies such as Rockall Energy, Seadrill Limited, and Stoneway Capital.
Lazard, whose business is split between asset management and financial advisory, reported a 5% surge in net revenue to $716.1 million for the quarter ended March 31. Its operating revenue rose nearly 8% to $699 million.
Operating revenue from the financial advisory business grew 22% to $388 million, while revenue from the asset management arm fell nearly 5% to $312 million as skittish investors pulled out of risky assets.
The company also saw $409 million in expenses due to compensation and other benefits, up from $385 million a year ago.
