By Chelsey Dulaney
Jefferies Group LLC said it is considering strategic options for
the commodities and financial-derivatives unit it bought from
Prudential Financial Inc. in 2011, while also reporting volatility
and a tepid trading environment dragged down results in its
November quarter.
Jefferies bought the Bache unit--one of the most storied names
on Wall Street--in mid-2011 as the firm sought to grow from a
securities-industry boutique focused on stock trading into a
full-service investment bank that helps clients raise money and
trade stocks, bonds and derivatives, where investors and big
industry players transfer the risks of future price movements.
Jefferies said Tuesday that the business has faced growth and
margin challenges, and the firm is in talks with third parties
about a potential combination with a similar business to improve
its competitive standing.
Jefferies also said it swung to a heavy loss in the quarter
ended Nov. 30 as revenue fell 43.5% from a year earlier. Overall,
Jefferies posted a loss of $92.4 million, compared with a
year-earlier profit of $109.9 million.
Fixed-income revenue fell 73% in the quarter, hurt by the weak
trading environment.
Investment-banking revenue slid 24%, as dampened capital markets
activity led to the postponement of deals.
The New York securities firm, a unit of Leucadia National Corp.,
is considered by some to be a harbinger for how other Wall Street
banks, particularly Goldman Sachs Group Inc. and Morgan Stanley,
may be faring in trading, mergers and acquisitions and other
businesses. Its quarter ends one month earlier than the other
banks.
Write to Chelsey Dulaney at Chelsey.Dulaney@wsj.com
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