Jefferies Cites New Wall Street Earnings Drag: Charity
NEW YORK (TheStreet) -- Since the financial crisis, investors and reporters reading Wall Street earnings have grown used to adjustments that take into account so-called onetime legal settlements, regulatory penalties, asset writedowns and a quarterly exercise in backing out accounting gains and losses from an investment bank's debt costs.
On Tuesday, Jefferies had to adjust for charity, and specifically, donations made to help a battered East Coast recover from a Hurricane Sandy, a late-October storm that destroyed thousands of homes and left millions without power.
On the second line of Jefferies earnings release, the investment bank pegs its quarterly net income at $72 million, but highlights the number would have been $81 million had it not been for donations made in the wake of Hurricane Sandy and unnamed costs associated with its acquisition by financial holding company Leucadia National(LUK) .
Earnings per share, excluding Sandy-related donations and M&A expense was 35 cent a share, and 31 cents a share on a GAAP-basis.
In a supplement to earnings, Jefferies states it paid $4.1 million in Hurricane Sandy donations. A financial supplement notes, adjusted revenue and EPS figures "
Jefferies is the first of a host of publicly traded investment banks to report fourth quarter earnings that could include a new type of earnings adjustment -- prospective Hurricane Sandy related aid.