Jefferies Financial Group reported mixed fourth quarter results after earnings declined due to asset management losses, even as strong investment banking activity pushed total revenue to a record level.
Jefferies Financial Group said net earnings fell 7.2 percent to $191 million in its fiscal fourth quarter as losses tied to First Brands Group offset gains across investment banking and capital markets operations.
The firm recorded total revenue of $2.07 billion during the quarter, reflecting a 5.7 percent increase from the same period last year. Company leaders said the results highlight both the strength of core advisory and trading businesses and the challenges tied to exposure in alternative investments.
Earnings Decline Driven by Asset Management Losses
The decline in quarterly profit was largely tied to a $30 million pretax loss stemming from the bankruptcy of auto parts supplier First Brands Group. Jefferies Financial Group holds a minority stake in the Point Bonita fund through its Leucadia Asset Management unit, which had significant exposure to receivables connected to First Brands customers.
Executives described the loss as a material setback and acknowledged that the situation revealed weaknesses in oversight processes within the asset management business. The firm said it is reviewing and strengthening internal controls to reduce similar risks going forward.
Despite the earnings decline, Jefferies noted that total revenue reached the highest quarterly level in its history. Revenue growth was supported by strong performance across advisory services and equity related trading activities.
Capital markets revenue rose 6.2 percent to $692 million compared with the prior year. Equity trading was a key contributor, with revenue increasing 18 percent year over year. Fixed income trading declined 14 percent, reflecting softer conditions in that segment during the quarter.
Investment Banking Strength Offsets Market Pressures
Investment banking remained the strongest performer for Jefferies in the quarter. Revenue from the division climbed 20 percent to $1.19 billion, driven by advisory mandates and underwriting activity.
Advisory revenue reached $634 million, marking the second highest quarterly total in the firm’s history. Debt and equity underwriting revenue also increased as Jefferies gained market share in select transactions.
Company leadership said investment banking momentum began building early in the quarter and continued through the end of the fiscal year. Executives pointed to improved client engagement and a steady pipeline of announced and pending deals.
Looking ahead, Jefferies Financial Group expressed optimism about market conditions in 2026. Management noted that expectations remain positive for mergers and acquisitions activity as well as capital markets issuance, provided there are no major disruptions to global financial markets.
The firm believes equity markets and advisory services will continue to benefit from corporate demand for strategic transactions and capital raising. At the same time, leadership noted that pricing pressures and volatility could continue to affect fixed income trading.
Jefferies Financial Group shares fell about 1 percent in extended trading following the earnings release. Over the past year, the stock has come under broader pressure, declining roughly 19 percent amid market volatility and concerns surrounding deal activity cycles.
Overall, the quarter reflected a combination of strong operating momentum in core businesses and challenges within asset management. Company executives said future performance will depend on sustained deal flow, disciplined risk management and continued recovery in capital markets.
