Siftel Financial 2nd-qtr results top estimates, but details on 3rd quarter charges sinks stock

Stifel Financial shares sink on coming charges

ST. LOUIS, Mo. — Shares of Stifel Financial Corp. fell in Tuesday trading after the company posted second-quarter profit that topped Wall Street expectations but said it expects to book big charges in the current quarter related to the recent buyout of a rival.

Stifel shares fell $2.26, or 4.8 percent, to close at $44.65.

Late Monday, the investment bank said its second-quarter net income rose to $21.1 million, or 60 cents per share, up 33 percent from $15.8 million, or 51 cents per share, a year ago.

The results include 9 cents per share in charges related to the buyout of Thomas Weisel Partners Group, which closed July 1. Excluding those costs, profit was 69 cents per share.

Net revenue rose 25 percent to $328 million, from $251.5 million last year.

Analysts surveyed by Thomson Reuters, on average, expected profit of 68 cents per share, on revenue of $321.1 million. Analysts typically exclude one-time charges from their estimates.

Analysts initially used words like “respectable” to describe the results, which came during a difficult quarter for the markets, and expected the stock to rise.

But in an early Tuesday conference call to discuss the second quarter, Chairman and CEO Ronald J. Kruszewski said Stifel’s board last week made changes to the company’s retirement plan to align it with requirements regarding deferred share-based compensation in the Thomas Weisel plan. The result will be adding about 62 million shares to the company’s outstanding equity.

Those changes will result in a charge of $105 million, or 21 cents to 22 cents for the current quarter, Kruszewski said.

Taking the charge will help the company avoid accounting for the deferred compensation in the future, he said, and make earnings clearer.