Investment bank Greenhill & Co. Inc. (GHL) on Wednesday reported a profit for the third quarter that was flat with last year amid a decline in advisory revenues and on investment losses. Both earnings and revenue missed analysts' estimates. The company's shares declined 2 percent in extended trade.
Advisory revenues for the quarter declined 13 percent to $72.76 million, primarily due to a decrease in the fees earned from completed assignments and private capital advisory assignments. This was offset in part by an increase in announcement and opinion fees as well as retainer revenue from strategic advisory assignments.
Year-to-date advisory revenues were down 12 percent while worldwide overall volume of merger and acquisition completions declined 26 percent.
Investment revenues for the quarter were negative $10.01 million, compared to negative $22.84 million lat year, due primarily to mark-to-market losses from Greenhill's investment in Iridium Communications Inc. (IRDM).
Greenhill noted that revenues and profit margins for the quarter were negatively impacted by a decline of $10.8 million in the current quarter and $23.6 million in the prior-year period in the value of the company's investment in Iridium Communications.
Total expenses for the quarter rose 3 percent from last year to $48.77 million.
Greenhill's third-quarter net income allocated to stockholders was $8.59 million, up slightly from $8.56 million in the prior-year quarter. Earnings per share were flat with last year at $0.28.
On average, analysts polled by Thomson Reuters expected the company to report earnings of $0.36 per share for the quarter. Analysts' estimates typically exclude special items.
Total revenues for the quarter rose 4 percent to $62.75 million from $60.36 million in the year-ago period, but missed analysts' consensus estimate of $70.92 million.
Further, the company's board declared a dividend of $0.45 per share to be paid on December 19 to common stockholders of record on December 5.
Separately, Greenhill said that Rupert Hill will join the company as a managing director based in London to enhance the company's focus on the healthcare sector. Hill has 17 years of investment banking experience, spending 14 of these focused on the healthcare sector.
Hill was most recently with Bank of America Merrill Lynch where he was Head of Healthcare for EMEA and Asia Pacific.
GHL closed Wednesday's regular trade at $51.04, up $1.72 or 3.49 percent on a volume of 639,070 shares. However, in extended trade, the stock declined $1.04 or 2.04 percent to $50.00.
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