Piper Jaffray’s Profit Falls 64%; Co. Makes 2 Acquisitions

Piper Jaffray’s Profit Falls 64%; Co. Makes 2 Acquisitions

Shares of the company's stock were trading down on news that second-quarter earnings fell short of analyst expectations.

Piper Jaffray Companies on Wednesday reported a 64 percent drop in second-quarter earnings, due largely to weakness in its brokerage business and a tax benefit experienced during the prior-year period.

Meanwhile, the Minneapolis-based investment bank and asset management firm said it recently completed two previously announced acquisitions.

Piper Jaffray reported earnings of $2.5 million, or $0.15 per share, for the quarter that ended June 30, down from $6.9 million, or $0.37 per share, during the same period a year ago. (The prior-year period, however, included a $7.1 million tax benefit.)

When excluding discontinued operations, Piper Jaffray’s earnings totaled $4.4 million, or $0.25 per share. That figure removes the results from the company’s Hong Kong capital markets business, which it shut down, and a division of its asset management segment that it sold earlier this year.

Piper Jaffray’s earnings from continued operations fell far short of the $0.55 per share that analysts polled by Thomson Reuters were expecting.

Net revenues, meanwhile, dipped 3.2 percent to $99.8 million during the quarter. Analysts had expected $119.75 million.

A 34 percent decrease in revenue in the company’s institutional brokerage business offset increases in its asset management and investment banking operations.

Piper Jaffray Chairman and CEO Andrew Duff said the company experienced “extremely challenging conditions in the fixed income markets” during the second quarter, pointing out that “most of our businesses performed well.”

Duff also called attention to Piper Jaffray’s two latest acquisitions. The company on Friday completed its $21 million deal for Seattle-Northwest Securities Corporation; on Tuesday, it said it completed its deal to acquire Charlotte, North Carolina-based Edgeview Partners for an undisclosed sum.

Shares of Piper Jaffray’s stock were trading down about 5 percent at $31.72 Wednesday afternoon.