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.

In reporting record full-year revenue and a near 50% fourth quarter profitability surge on Tuesday morning, Jefferies(JEF) added a new twist to Wall Street's earnings bungle: charity.

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 "reflect amortization of intangible assets recognized in connection with the acquisitions of Hoare Govett and the Bache entities, donations to Hurricane Sandy relief of $4.1 million and transaction costs (primarily professional fees) associated with the announced merger with Leucadia National Corporation of $4.2 million."

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.