Lazard Revenue, Profits Plunge
Bermuda’s Lazard Ltd., the largest independent merger adviser, today [Feb. 6] said fourth-quarter profit declined on a decrease in revenue from advising on deals.
Net income fell to $1.4 million, or one cent a share, from $104.5 million, or 76 cents, in the same period a year earlier, the Hamilton-based firm said in a statement.
Revenue from mergers and acquisitions [M&A] activity plunged 36 percent to $167.1 million from the year earlier, according to the statement.
Global announced deal volume fell in the third and fourth quarters as a downgrade of US debt and the European sovereign- debt crisis stoked investor concern of a worldwide recession.
Lazard, run by Chief Executive Officer Kenneth Jacobs, 53, ranked ninth on the financial advisory league tables last year, overseeing $232.6 billion in announced transactions, according to data compiled by the Bloomberg financial news network.
“We saw turmoil in the markets beginning in the summer, and by the mid fourth-quarter, you were really feeling the impact of that,” Mr. Jacobs told Bloomberg after the results were announced. “Things that were started didn’t get completed. Things that were almost done got pushed off. That’s the nature of what happens when you get periods of turmoil.”
Financial advisory revenue, which includes fees from overseeing M&A, capital markets and restructuring, fell 26 percent to $260.5 million in the fourth quarter from the same period a year earlier, according to the statement. Full-year revenue for the segment declined 11 percent to $992.2 million from 2010.
Asset management revenue was $204.4 million in the three months-ended Dec. 31, down from $255.7 million. Full-year revenue from the unit rose 6 percent to $882.8 million.
Lazard cut discretionary bonuses by about 20 percent in 2011, the firm said in the statement. The company set aside $337 million in compensation expenses for the fourth quarter, compared with $347.7 million in the same period a year earlier.
Lazard repurchased $206 million of shares in 2011, according to the statement.
