LUK Leucadia National Corp.

By Justin Baer 

Jefferies Group LLC swung to a quarterly loss during its first quarter, as trading revenue tumbled due in part to choppy markets and concerns over economic growth.

The firm, a unit of Leucadia National Corp., reported a net loss of $166.8 million during its fiscal first quarter, compared with a profit of $12.9 million a year earlier. Revenue fell 49%, to $299 million.

"Our overall first-quarter results reflect an exceptionally volatile and turbulent market environment during our first fiscal quarter, although our core businesses performed reasonably, considering the environment," Rich Handler, chairman and chief executive, and Brian Friedman, chairman of Jefferies's executive committee, wrote in a statement. "A quiet December was followed by an extremely challenging January and first few weeks of February."

The first quarter extended a brutal stretch for the firm, whose debt-trading revenue plunged by 65% last fiscal year. Jefferies responded by shrinking its balance sheet. That continued during the first months of the new fiscal year.

"As we have done through many other turbulent periods in our history, we reduced our already smaller balance sheet to continue to reduce risk during this difficult period," the executives said.

In the first quarter, trading revenue plunged 82% to $58.8 million. Fixed-income revenue fell to $56.8 million from $126 million. Stock trading dropped to just $1.7 million, from $203.5 million, largely on the markdowns of two equity block trades.

In its statement, the firm's executives said "it appears markets have not only stabilized, but aggressively snapped back" in the early days of the second quarter, beginning in March.

Write to Justin Baer at justin.baer@wsj.com

(END) Dow Jones Newswires

March 15, 2016 07:34 ET (11:34 GMT)

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