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Jefferies Climbs on Fourth-Quarter Profit Surge

Jefferies shares rose after the financial-services firm reported a 79% surge in quarterly net income per share and boosted its stock-buyback plans.
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Jefferies Financial Group  (JEF) - Get Jefferies Financial Group Inc. Report shares rose on Tuesday after the financial-services company reported a 79% surge in fourth-quarter net income per share and boosted its stock-buyback plans.

Shares of the New York investment bank at last check were 3.4% higher at $25.45.

For the quarter ended Nov. 30 Jefferies reported earnings of $1.11 a share, up from 62 cents in the year-earlier quarter. Shares outstanding dropped 12% to 277.3 million.

The company generated net revenue of $1.86 billion in the period, up 68% from $1.11 billion a year earlier. 

Investment-banking revenue hit a record for the quarter at $916 million, including $357 million from advisory, $341 million from equity underwriting and $209 from debt underwriting.

The board also increased the company's stock buyback authorization by $193 million to a total of $250 million.

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"We gained market share and ... are optimistic that our momentum and strength will be sustained in 2021," Chief Executive Richard Handler and President Brian Friedman said in a statement. 

In a letter to shareholders, Handler and Friedman discussed the impact of the coronavirus pandemic had had on the company. 

And they said that going forward, the firm would institute a hybrid operating model, "creating a combination of a series of active central offices and meeting places, balanced with the opportunity to work from home."

"We believe 2021 will be a dangerous year of making sure nobody gets careless or reckless as the covid-19 war winds down and peacetime approaches," the letter said.

The executives said the pandemic has shown "that we all have much more flexibility than we ever realized in how, where and when we can work."  

The company has been surveying employees about how and where they might want to work in the future.

“We wish it didn’t take a pandemic to show us this was possible, but we certainly aren’t going to let any of these newfound insights go to waste,” the letter said.