NEW YORK (
) -- Shares of securities firm
are experiencing their biggest gain in over a year, after reporting revenue and earnings on Tuesday morning that came in ahead of Street expectations.
Jefferies revenue rose 13% to near-$670 million and its earnings per share of 41 cents was 4 cents above the consensus estimate.
Last week, noted bank analyst Meredith Whitney launched coverage of Jefferies at outperform and with a $27 price target. As a result of the 10% spike on Tuesday morning, Jefferies shares were trading above $25.
Investment banking revenue was the key driver of earnings success for Jefferies, doubling to $256 million.
Jefferies made a big push into healthcare M&A when it poached most of the UBS healthcare team. Most recently, Jefferies was named co-advisor with Goldman Sachs to Valeant Pharmaceutical, which announced a deal to merge with Biovail on Monday.
Jefferies trading commissions were flat and its principal transactions down by 38% for the second quarter.
Jefferies shares were up just short of 10% on Tuesday morning, and had surpassed their average daily trading volume before midday.
Jefferies' second-quarter results can't be compared to the prior year because the securities firm changed its year-end from December to November.
For the five-month period ended May 31, net revenue increased 7%, to $999 million. Investment banking revenues more than doubled to $352 million during the same time period.
Net profit increased 18% to $119 million in the five-month period.
Not all analysts covering Jefferies were impressed by the second quarter results, though. Ticonderoga Securities reiterated its sell rating on the stock, citing a deterioration in book value.
-- Reported by Eric Rosenbaum in New York.
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