Earnings Preview: Jefferies Group

Jefferies Group (JEF) is expected to report Q2 earnings before market open Tuesday, July 22, with a conference call scheduled for 9:00 am ET.

Guidance

Analysts are looking for EPS of (16c) on revenue of $274.98M. The consensus range for EPS is (24c) to (4c), while the consensus range for revenue is $162.9M to $312.8M, according to First Call.

Analyst Views

Friedman Billings earlier this month reduced their Q2 EPS estimate for Jefferies. The firm noted that the capital markets continued to perform poorly in Q2, causing companies' investment banking revenues to drop. As a result, the firm expects Jefferies' Q2 investment banking revenue to be "disappointing," and they remain cautious on the stock. Friedman Billings also believes that Jefferies' results may be hurt by continued principal trading losses and further write-downs within fixed income inventories.

Jefferies announced last week that it had expanded its U.S. government bond operations by hiring an additional bond trader and two more senior bond sales executives. Investors may be looking to hear whether Jefferies plans to step up its government bond trading business while deemphasizing other areas.