* 1st qtr EPS of 20 cents vs 43 cents year-ago
* Adjusted EPS of 33 cents vs consensus 25 cents
* One-time charge of $25 million for severance pay
* Weaker asset management revenue, higher costs
April 27 (Reuters) – Lazard Ltd’s first-quarter
earnings declined 54 percent due to weaker asset-management
revenue and high costs, including a previously announced charge
of $25 million for severance pay.
But the boutique investment bank beat analyst estimates by a
wide margin when adjusting for that one-time charge.
Lazard reported on Friday a profit of $26 million, or 20
cents per share, down from $55 million, or 43 cents per share,
in the year-ago period.
Adjusting for the one-time charge, Lazard’s earnings fell 23
percent, to $44.8 million, or 33 cents per share. Analysts had
expected a comparable profit of 25 cents per share, according to
Thomson Reuters I/B/E/S.
The first quarter was generally a weak period for investment
banking business across Wall Street, leading analysts to assume
that profits would be weak compared with a strong first quarter
in 2011.
However, Lazard’s financial advisory business reported
higher revenue thanks to a sharp rise in restructuring activity,
as well as an increase in fees from mergers and acquisitions and
strategic advice.
On the other hand, Lazard’s other major business, asset
management, reported a 6 percent decline in revenue. The
division faced $200 million in net outflows during the quarter
and a corresponding decline in management fees.
Overall, Lazard’s net revenue rose 11 percent, to $486
million from $438 million in the year-ago period.
A rise in operating expenses — including increases in
compensation costs and higher spending on items like office
space, equipment and marketing — cut into the investment bank’s
bottom line. Overall operating expenses rose 23 percent, to
$448.2 million from $364.6 million a year before.
