Boom time

1 May 2014 By Antony Currie Follow @AntonyMCurrie

Investment bankers are increasingly confident that more deals are on the cards. They cite a recovering Europe, more corporate optimism and a recent spate of bold transactions. Lazard, though, is one of the few firms to have reaped the benefit of these trends already.

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On May 1 Lazard reported first-quarter net income of $81.3 million, compared with $37.2 million in the same period last year. At 61 cents a share, earnings beat the consensus estimate of sell-side analysts of 54 cents a share.

Financial advisory posted operating revenue of $275 million, an increase of 64 percent from last year’s first quarter. M&A and related fees accounted for $239 million of that. Asset management reported operating revenue of $262 million, up 9 percent from the same period last year. M&A and asset management revenue were each a first-quarter record.

The firm’s operating margin was 22.1 percent, compared with 15.9 percent in the same period last year and 26.4 percent in the fourth quarter. Lazard’s target is for its annual operating margin to be 25 percent this year.

Evercore reported first-quarter earnings on April 23. Revenue of $149.1 million was 32 percent lower than the fourth quarter and 2 percent below the same period last year.

Greenhill also reported first-quarter earnings on April 23. Revenue of $43.6 million was 45 percent lower than the same period last year and 43 percent lower than the fourth quarter.

Moelis & Co is due to report its first quarterly earnings as a public company on May 7. In a revised prospectus for its initial public offering published on April 8, the company announced that it expected to post revenue of $113 million to $115 million for the first quarter, a 90 percent increase from the same period a year ago.

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