Raymond James (RJF) Sees Q2 EPS 'Well Below' Street Estimtes

April 15, 2009 7:15 AM EDT

Raymond James Financial (NYSE: RJF) announced today that results for its second fiscal quarter ended March 31 will be well below the current consensus analysts' estimate of $0.37 per share.

Most significant, the dramatic deterioration of commercial real estate values during the March quarter, as well as credit exposures related to corporate borrowers whose business is highly dependent on consumer spending, led to an abnormally high level of provision for loan losses and charge-offs at Raymond James Bank. Further, the Bank added to loan reserves against its residential loan portfolio given an increase in delinquencies and continued declining residential property values.

Preliminary results indicate a total loan loss provision expense of approximately $75 million, as contrasted to $25 million in the prior quarter. Total charge-offs for the quarter will be $40 million, including $10 million that had been reserved for in prior quarters and an unexpected charge of $28 million for a loan to a commercial real estate finance company. The reserve for loan losses at March 31 is expected to be approximately $142 million, or 1.83 percent of outstanding loans. Non-performing assets are expected to be approximately $143 million, which includes $42 million to borrowers who are current but may encounter future difficulties in meeting their obligations.

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