(Reuters) - Lazard Ltd reported a higher-than-expected quarterly profit on Thursday, as its M&A advisory business got a boost from a string of big-ticket deals in the United States, sending its shares up 3.8 percent before the bell.
Lazard, often seen as a bellwether for the mergers and acquisitions advisory industry, said revenue in its financial advisory business fell 15 percent to $330 million, but still came above Wall Street estimates of $322.85 million.
M&A activity in the United States got off to its strongest start since 2000, with $489.52 billion dollars in announced deals, up 9.4 percent compared to a year ago.
Although the overall number of deals fell by 40 percent year-over-year, Lazard advised on some big deals including IBM Corp’s $34 billion acquisition of Red Hat and Athenahealth Inc’s $5.7 billion sale to Veritas Capital.
“In our advisory business, strong activity in U.S. was offset by softening in Europe,” said Chief Executive Officer Kenneth Jacobs on a call with analysts.
Global M&A activity fell 17 percent in the first quarter on fears of an economic slowdown and a no-deal Brexit.
Financial advisory was also a big driver of profits for major Wall Street banks, including Goldman Sachs Group Inc and JPMorgan Chase & Co and Citigroup Inc, in the latest quarter.
Revenue at Lazard’s asset management business also beat estimates even though it fell 14 percent to $283.7 million.
The Bermuda-headquartered company said total revenue fell about 14 percent to $661.7 million.
Net income attributable to Lazard fell to $97 million, or 80 cents per share, in the first quarter ended March 31 from $159.7 million, or $1.21 per share, a year earlier.
On an adjusted basis, the company earned 87 cents per share.
Analysts had expected a profit of 65 cents per share, according to IBES data from Refinitiv.
Reporting by Bharath Manjesh in Bengaluru; Editing by Anil D'Silva and Saumyadeb Chakrabarty