Its revenues up, Raymond James Financial buys back more stock
The St. Petersburg-based financial services company reported revenues of $1.93 billion, up 5 percent over the same time last year, and earnings of $1.80 per share for the quarter that ended June 30.

By Richard Danielson
Tampa Bay Times
Published: Jul 25, 2019

ST. PETERSBURG - With robust growth in revenues, Raymond James Financial continues to buy back is own stock, spending $85 million to purchase about 1 million shares during the three months that ended on June 30.

That brings Raymond James's total stock repurchases to 7.7 million shares over the last nine months. The company has spent $591 million buying its stock at an average cost of $76.70 per share. (By comparison, Raymond James stock was trading at $83.21 a share, down more than 3 percent, late Thursday morning.)

Of course, Raymond James is not alone here. In 2018, U.S. corporations announced a record $1.1 trillion in stock buybacks, with many using the cash they realized after the Republican tax cut lowered the corporate tax rate from 35 to 21 percent.

Some economists predicted companies would use the money to buy their own stock, rewarding their own stockholders, investors, and, in some cases, executives who sell their stock, as opposed to plowing the money into higher wages or business expansions, as supporters of the bill had predicted.

Raymond James probably isn't done, either. The company still has authorization from its board to spend another $373 million on future share repurchases, which chief executive officer Paul Reilly would take place incrementally.

Generally, it was a good quarter for Raymond James, with revenues of $1.93 billion, up 5 percent compared with the same three months last year, and earnings of $1.80 per share.

"Overall, I am pleased with our results for the third quarter," Reilly told analysts on a conference call Thursday. "Despite some elevated expenses and decline in investment banking revenues that were both largely timing-related, business metrics were strong, and I'm encouraged by the solid performance in a number of key areas during the quarter."

For the first nine months of its fiscal year, which ends on Sept. 30, Raymond James saw record revenues of $5.72 billion, with all of its core business segments producing record net revenues.

Going forward, the company is watching for an expected Federal Reserve decision next week on whether to cut interest rates, as demanded by President Trump. "We intend to maintain our competitive position at or near the top of our peer group in virtually all of the strata of account sizes, so our impact is going to be largely dependent on what the competition does," Raymond James chief financial officer Jeffrey P. Julien said. That said, Julien said his best guess is that if the Fed cuts rates by a quarter-point, that could cost Raymond James $5 million to $10 million a quarter by reducing the spread between its borrowing costs and the interest income it generates.

"We'll see what happens with this rate cut," Reilly said, "if there's a rate cut this month."

Contact Richard Danielson at rdanielson@tampabay.com or (813) 226-3403. Follow @Danielson_Times