Trading Bounty at Jefferies

Investment bank Jefferies(JEF) reported a 59% gain in first-quarter profits, fueled by a big jump in trading revenue that easily surpassed Wall Street expectations.

In the quarter, the firm earned $58.4 million, or 82 cents a share, compared with $36.7 million, or 56 cents a share, in the year-earlier period. Revenue rose 52% to $524 million.

Jefferies blew past Wall Street forecasts. Analysts, as surveyed by Thomson Financial, were looking for earnings of 64 cents a share on revenue of $329.6 million.

Revenue from principal transactions, which includes proprietary trading, was the big surprise in the quarter. Total revenue from trading-related activities rose 116% to $156 million.

On a percentage basis, Jefferies traders outperformed Merrill Lynch(MER), which also reported blowout numbers on Tuesday. The big Wall Street firm reported a top-line gain of 111% on $1.99 billion in principal transactions.

Meanwhile, Jefferies also announced a 2-for-1 stock split and said it was boosting its quarterly dividend by 67%. The split will occur on May 15. The dividend, after the split, will be raised to 12.5 cents, from the current 7.5 cents a share.

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