LUK Leucadia National Corp.

Jefferies Group LLC said revenue slid in its fourth quarter, dragged down by weakness in the investment firm's fixed-income business.

Results didn't meet expectations, Chief Executive Rich Handler said. Fixed income, "a solid to excellent business for Jefferies in prior years, did not perform well," Mr. Handler said, amid ultralow interest rates, a collapse in global energy markets and low trading volume.

The boutique investment firm, which is part of Leucadia National Corp., is viewed by some in the industry as a harbinger of results for other Wall Street firms as its fiscal period ends a month earlier than most banks.

In Jefferies' fourth quarter, revenue from fixed income dropped 82% to $8.4 million. Revenue in the firm's equities business also fell, sliding 22% to $123.7 million. Those declines resulted in a 41% drop in total sales and trading revenue.

Amid record deal activity this year, though, Jefferies saw investment banking revenue rise 18% as advisory revenue soared. Performance in that business helped to partially counter declines elsewhere.

Facing more challenging market conditions particularly in fixed income, Jefferies said earlier this year that it would sell its Bache commodities and financial derivatives unit to Socié té Gé né rale SA. The exit of that business, which it acquired in 2011, "removes a significant drag on Jefferies profitability," said Mr. Handler.

Overall, the firm reported a profit of $24.7 million, versus a loss of $100.1 million a year earlier. Revenue decreased 19% to $146.3 million. Excluding the Bache business, Jefferies said it earned $37 million on $513 million in revenue.

A number of banks and investment firms also pointed to whipsawing markets for disappointing results in their third quarters, and some have outlined plans to scale bank. Last month, The Wall Street Journal reported that Morgan Stanley would slash hundreds of jobs from its debt and currencies division, a sign that the firm expects a prolonged slump in trading revenue.

Write to Lisa Beilfuss at lisa.beilfuss@wsj.com

(END) Dow Jones Newswires

December 15, 2015 08:35 ET (13:35 GMT)

Leucadia (NYSE:LUK)
Historical Stock Chart
From Mar 2024 to Apr 2024

Leucadia (NYSE:LUK)
Historical Stock Chart
From Apr 2023 to Apr 2024