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Greenhill Q4 Profit Declines On Investment Losses

Advisory firm Greenhill & Co. Inc. (GHL) on Wednesday reported a 6 percent decline in profit for the fourth quarter from last year, reflecting loss recognized on the sale of the company's European investments.

Advisory revenues for the quarter rose 17 percent from the year-ago period to $100.39 million, reflecting an increase in the fees earned from completed assignments as well as increase in retainer fees from strategic advisory assignments.

Advisory revenues for the quarter were the highest since 2007 and third largest in the company's history. The company noted that the quarter was the most active for global mergers and acquisitions in several years.

Greenhill recorded an investment loss of $8.06 million in the quarter, compared to gain of $8.97 million in the prior-year period.

During the fourth quarter, the quoted market value of Greenhill investment in Iridium declined, resulting in an investment loss of $3.8 million. In addition, Greenhill recorded a loss of $4.8 million on its investment in merchant banking funds, including a realized loss of $3.4 million on the sale of Greenhill Capital Partners Europe L.P.

Greenhill's fourth-quarter net income was $15.13 million or $0.50 per share, down from $16.11 million or $0.53 per share in the year-ago period. On average, seven analysts polled by Thomson Reuters expected the company to report earnings of $0.72 per share. Analysts' estimates typically exclude special items.

Total revenues for the quarter declined 2 percent to $92.33 million from $94.50 million in the year-ago quarter. Analysts had a consensus revenue estimate of $103.05 million.

For fiscal 2012, Greenhill's net income was $42.09 million or $1.38 per share, down from $44.58 million or $1.44 per share in the previous year. Revenues for the year declined 3 percent to $285.08 million from $293.99 million in the prior year.

Analysts expected the company to earn $1.60 per share for the year on revenues of $291.36 million.

Greenhill's board declared a dividend of $0.45 per share to be paid on March 20 to common stockholders of record on March 6. The board also authorized share repurchases of up to $100 million in 2013.

GHL closed Wednesday's trading at $58.95, down $0.47 or 0.79 percent on a volume of 349,012 shares. In after-hours, the stock further declined $0.20 or 0.34 percent to $58.75.

by RTTNews Staff Writer

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