Piper Jaffray Profit Falls 49% on Credit Trouble


Piper Jaffray, an investment bank focused on mid-sized companies, on Wednesday said third-quarter operating profit fell 49 percent, hurt by turmoil in credit markets.

Piper shares were down 5 percent on the New York Stock Exchange. They had already fallen 20 percent this year as of market close Tuesday.

Earnings from continuing operations fell to $4.8 million, or 28 cents per share, from $9.5 million, or 50 cents, a year earlier. Revenue from continuing operations fell 20 percent to $92.9 million.

Net income fell to $4.4 million, or 26 cents per share, from $186.6 million, or $9.79 per share. Year-earlier results included a $177.1 million gain from the sale of Piper's retail brokerage to Swiss bank UBS .

Analysts on average forecast profit of 53 cents per share on revenue of $114.3 million, according to Reuters Estimates.

"While our business is not focused on the most troubled aspects of the credit markets, namely subprime mortgages and (leveraged) loan commitments, the fallout from the turbulence in these markets negatively impacted nearly all of our businesses," Chief Executive Andrew Duff said in a statement. "We believe the adverse conditions were largely concentrated in the third quarter."

From continuing operations, investment banking revenue fell 28 percent to $52.5 million, hurt by a "sharp decline" in offerings from the consumer and health-care sectors.

Institutional sales and trading revenue fell 11 percent to $38.8 million.