Lazard (LAZ +5.6%) gets past a weak deal market, reporting a 9% increase (earnings) in its financial advisory business in Q2 thanks to getting a piece of 4 out of 10 of the largest M&A deals this year. Compensation expense rose 17%, but as a percentage of revenue fell to 60% from 62.7% a year ago. Evercore (EVR +1%) also overcame the sluggish environment (earnings), taking market share as investment banking revenues rose 18.8% Y/Y. Its compensation ratio dropped to 63.5% from 66.3% a year ago.
Investment banking advisory Evercore Partners (EVR) is replacing Lufkin Industries (LUFK) in the S&P SmallCap 600 after the close of trading on Monday, July 1. A subsidiary of S&P 100 & 500 constituent General Electric (GE) is acquiring LUFK in a deal expected to be completed soon. EVR +1% AH.
Lazard (LAZ -0.6%) recovers from a big opening decline caused by a sizable earnings miss. Financial advisory revenue of $168M fell 39% Y/Y, led by M&A off 37%. Asset management revenue of $240M rose 14%. Management fees of $220M rose 10%. "Our first quarter results reflect the uneven pace of the M&A markets balanced by the strength in equity markets," says CEO Ken Jacobs. The cost-cutting plan outlined last year is nearly complete, he reports, with the full beneficial impact to be felt in 2014. Greenhill (GHL -0.5%). Evercore (EVR +0.3%).
Remember the supposed pickup in the M&A cycle, asks PAA Research, noting continued damage in the boutique investment bank sector which mostly rolled over several weeks ago. EVR -5%, GHL -2.8%, SF -3.2%, OPY -1.6%, PJC -1.7%.