(Reuters) – Raymond James missed quarterly profit estimates on Wednesday as Wall Street’s prolonged dealmaking slump impacted its investment banking business, sending its shares down 2% in extended trading.
Investment banking revenue in the third-quarter ended June 30 fell 35% to $141 million, compared to a year earlier.
M&A activity came to a near standstill last year amid heavy market volatility and a risk-off sentiment as investors grappled with rising interest rates and geopolitical turmoil.
While sentiment has since improved considerably this year, large buyout deals and multi-billion listings in the U.S. are yet to stage a meaningful comeback.
The downturn in the once-lucrative investment banking unit echoes the results of larger rivals Goldman Sachs and Morgan Stanley reported earlier this month.
On an adjusted basis, Raymond James reported a profit of $1.85 per share, missing analysts’ average estimate of $2.16.
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In a bright spot, net revenue in the quarter climbed 7% to $2.91 billion.
Net income available to common shareholders came in at $369 million, or $1.71 per diluted share, compared with $299 million or $1.38 per diluted share, a year earlier.
(Reporting by Pritam Biswas in Bengaluru; Editing by Arun Koyyur)