Lazard reported a sharp decline in second-quarter profitability, with net income tumbling 91% from the year-ago period. For the three months ended June 30, the firm posted net income of $5 million, or 3 cents per share, down from $55 million, or 52 cents per share, in the same quarter a year earlier.
The company said the provision for income taxes in the second quarter totaled $24 million. "This quarters earnings were impacted by an elevated tax rate, which is not indicative of the full-year rate," CFO Tracy Farr said in a statement.
Shares of Lazard were trading nearly 7% lower in thin premarket activity following the results.
Revenue at Lazards financial advisory arm fell 9% in the quarter to $450 million, reflecting continued unevenness in deal flow. The company noted that while periods of market stability have encouraged corporate activity such as acquisitions and public listings, subsequent bouts of volatility have repeatedly delayed transactions, producing an uneven recovery for investment banks.
Asset management provided a counterweight to the weakness in advisory. Lazard said revenue from asset management rose 20% in the quarter to $351 million. The firm reported its best first-half net inflows in nearly 20 years and reached record reported assets under management.
At the end of the quarter, Lazard reported $285 billion in assets under management, up from $248 billion a year earlier. The company attributed part of the environment to ongoing market dynamics: geopolitical tensions, shifting interest rate expectations and the fast pace of AI-driven change have kept global markets volatile. That volatility, the firm said, has prompted clients to reposition portfolios and has supported fee-based revenue for asset managers across the industry.
Key takeaways
- Net income fell to $5 million, or 3 cents per share, versus $55 million, or 52 cents per share, a year earlier.
- Financial advisory revenue declined 9% to $450 million, while asset management revenue increased 20% to $351 million.
- Assets under management rose to $285 billion from $248 billion year-over-year, with the firm reporting its best first-half net inflows in nearly two decades.
Risks and uncertainties
- An elevated tax rate in the quarter significantly reduced reported earnings; the company said this is not indicative of the full-year rate.
- Volatility in capital markets continues to delay transactions, creating an uneven recovery in investment banking activity.
- Ongoing geopolitical tensions, shifting interest rate expectations and rapid AI-driven change are keeping markets volatile, which affects deal timing and advisory revenue.
The quarter highlights a bifurcated performance within Lazard: weakness in fee income tied to transactional advisory work alongside stronger asset-gathering and fee-based revenue from its asset management operations. Managements comment on the tax rate underscores a specific, near-term headwind to reported earnings, while the scale of assets under management and first-half inflows point to continued resilience in the firms wealth and asset-management franchise.
No additional forward guidance or new quantitative outlooks were provided in the companys announcement.