Jefferies profit misses estimates despite investment banking gains

Investing.com -- Jefferies Financial Group Inc (NYSE: JEF) Inc reported fourth-quarter earnings that fell short of analyst expectations on Wednesday, despite posting strong investment banking revenue growth as dealmaking activity rebounded across Wall Street.

The financial services company reported earnings per share of $0.85 for the quarter, missing the analyst estimate of $0.93, while revenue came in at $2.07 billion, slightly above the consensus estimate of $2.02 billion. Shares fell 1.8% in after-hours trading following the results.

Investment banking revenue surged 20.4% to $1.19 billion compared to the same period last year, reflecting market share gains and increased corporate and sponsor activity. Advisory revenue reached $634 million, the company’s second-best quarter on record, while equity underwriting revenue jumped significantly, accounting for approximately 44% of annual equity underwriting revenue in the fourth quarter alone.

"Investment Banking net revenues were $1.19 billion, up 20% from the prior year quarter, driven by market share gains and a stronger overall market for our services," said Richard Handler, CEO, and Brian Friedman, President, in a joint statement.

Capital markets revenue increased 6% to $692 million, with equities revenue growing 18% due to higher global volumes and market share gains. However, fixed income revenue declined 14% amid persistent credit market headwinds.

The company’s asset management segment saw lower revenue compared to the prior year quarter, impacted by a $30 million pre-tax loss related to its investment in Point Bonita, a fund advised by Jefferies. Excluding this loss, adjusted earnings per share would have been $0.96.

Jefferies maintained its quarterly cash dividend of $0.40 per share, payable on February 27, 2026, to shareholders of record as of February 17, 2026.

The results offer an early glimpse into Wall Street’s investment banking performance, with larger rivals including Morgan Stanley, Goldman Sachs, and JPMorgan Chase set to report their earnings next week.

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