Not a lot seems to change on a quarter-to-quarter basis with A.G. Edwards
Nevertheless, results still manage to stay more or less on track. Net revenue was a bit light in this period but was still up nearly 6%. Commission revenue was all but flat, and what growth there was seems to have come from annuities. Asset management was the big achiever, with more than 15% growth, and revenue from principal transactions fell more than 10% on less fixed income trading. And while the company has been working to expand its investment banking efforts (in part by investing in personnel), revenue here was basically flat as well.
On the expense side, non-interest expenses were up about 6%, though compensation rose less than 5%. The company also took about $11 million (or $0.07 per share) in reserves and settlements for certain legal matters, though that was partially offset by a gain relating to taxes.
Speaking of legal matters, it does look like the company is going to face some discipline over mutual fund market timing and may also face sanctions regarding the supervision (or insufficiency thereof) of some fee-based accounts. Given the company's pretty good reputation, though, I'd say these are isolated incidents at worst.
At the bottom line, this remains a good company and a good play on the likely ongoing growth in retirement planning and asset management. The major hitch is still the same, though. Namely, the stock just doesn't look priced to offer major market-beating returns over the next few years. Should it get cheaper, say a trailing P/E in the low teens, the story might become much more interesting.
For more related Foolishness:
Fools, now is the time to open your hearts and wallets to worthy causes! Please support our five Foolish charities at www.foolanthropy.com.
Fool contributor Stephen Simpson has no financial interest in any stocks mentioned (that means he's neither long nor short the shares).