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KBW Inc. Reports Operating Results (10-Q)
Posted by: gurufocus (IP Logged)
Date: November 4, 2011 05:40PM

KBW Inc. (KBW) filed Quarterly Report for the period ended 2011-09-30. Kbw Inc. has a market cap of $489 million; its shares were traded at around $13.98 with and P/S ratio of 1.1. The dividend yield of Kbw Inc. stocks is 1.5%.



Highlight of Business Operations:

Investment banking revenue was $32.1 million for the three months ended September 30, 2011 compared with $38.4 million for the same period in 2010, a decrease of $6.3 million, or 16.5%. M&A and advisory revenue increased $4.0 million, or 21.6%, to $22.5 million for the three months ended September 30, 2011 compared with $18.5 million for the same period in 2010. This increase was primarily due to a higher number of M&A engagements completed in the third quarter of 2011 compared with the same period in 2010. Capital markets revenue was $9.6 million for the three months ended September 30, 2011 compared with $19.9 million for the same period in 2010, a decrease of $10.3 million, or 51.8%, primarily due to a lower number of U.S. equity capital market transactions in the third quarter of 2011 as the total capital raising for banking companies decreased significantly.

Commissions revenue increased $6.9 million, or 24.5%, to $35.1 million for the three months ended September 30, 2011 compared with $28.2 million for the same period in 2010. U.S. equity commissions increased $4.8 million, or 24.4%, to $24.5 million for the three months ended September 30, 2011 compared with $19.7 million for the same 2010 period, primarily due to higher trading volumes. Non-U.S. equity commissions increased $2.1 million, or 24.7%, to $10.6 million for the three months ended September 30, 2011 compared with $8.5 million for the same period in 2010, primarily due to higher trading volumes.

Investment banking revenue was $84.9 million for the nine months ended September 30, 2011 compared with $169.5 million for the same period in 2010, a decrease of $84.6 million, or 49.9%. M&A and advisory revenue was $38.9 million for the nine months ended September 30, 2011 compared with $49.4 million for the same period in 2010, a decrease of $10.5 million, or 21.3%, primarily due to fewer completed advisory engagements in 2011. Capital markets revenue was $46.0 million for the nine months ended September 30, 2011 compared with $120.1 million for the same period in 2010, a decrease of $74.1 million, or 61.7%, primarily due to a significantly lower number of U.S. equity capital market transactions in 2011 as the total capital raising for banking companies decreased significantly.

Commissions revenue increased $2.0 million, or 2.0%, to $101.7 million for the nine months ended September 30, 2011 compared with $99.7 million for the same period in 2010. Non-U.S. equity commissions increased $3.9 million, or 14.7%, to $30.4 million for the nine months ended September 30, 2011 compared with $26.5 million for the same period in 2010, primarily attributable to higher trading volumes. U.S. equity commissions were $71.3 million for the nine months ended September 30, 2011 compared with $73.2 million for the same 2010 period, a decrease of $1.9 million, or 2.6%, primarily due to lower trading volumes.

Principal transactions, net revenue was $9.4 million for the nine months ended September 30, 2011 compared with $39.0 million for the same period in 2010, a decrease of $29.7 million, or 76.0%. Trading for our own account, including firm investments, resulted in negative revenue of $9.0 million for the nine months ended September 30, 2011 compared with revenue of $8.8 million for the same period in 2010 and equity market making resulted in negative revenue of $9.4 million for the nine months ended September 30, 2011 compared with negative revenue of $3.2 million for the same period in 2010, reflecting the significant decline in global equity markets in the third quarter. Fixed income revenue was $25.6 million for the nine months ended September 30, 2011 compared with $33.9 million for the same period in 2010, primarily due to reduced client activity reflecting widening credit spreads. The realized gains and change in the fair value of our trust preferred backed collateralized debt obligations and related securities owned resulted in revenue of $2.2 million for the nine months ended September 30, 2011 compared with negative revenue of $0.5 million for the same period in 2010.

Read the The complete Report



Stocks Discussed: KBW,
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