Nomura (NYSE:NMR) Announces Earnings Results

Key Points

• Nomura reported quarterly EPS of $0.16, missing the consensus of $0.21, but beat on revenue with $3.64 billion; however, Q4 results were softer with group income before taxes down ~20% and net income down ~19% due to weaker Wholesale performance, an Investment Management impairment, and higher expenses.
• Full-year results were strong: group net revenue rose 15% to JPY 2,167.7 billion, income before taxes increased 14% to JPY 539.8 billion, with record net income and ROE of 10.1%, while Investment Management AUM hit a record JPY 136.9 trillion.
• Capital and shareholder returns remain supportive with a CET1 ratio of 12.9%, an ordinary Q4 dividend of JPY 24 (annual JPY 51) and a prior JPY 60 billion buyback; shares fell about 4.8% to $7.87 and JPMorgan recently upgraded the stock to "overweight."

Nomura (NYSE:NMR - Get Free Report) released its quarterly earnings data on Friday. The financial services provider reported $0.16 earnings per share (EPS) for the quarter, missing the consensus estimate of $0.21 by ($0.05), Zacks reports. The company had revenue of $3.64 billion for the quarter, compared to analyst estimates of $3.43 billion. Nomura had a return on equity of 9.88% and a net margin of 7.81%.

Here are the key takeaways from Nomura's conference call:

• Full-year results were strong with group net revenue up 15% to JPY 2,167.7 billion, income before income taxes up 14% to JPY 539.8 billion and a record-high net income and ROE of 10.1%.
• Wealth Management and Investment Management were key drivers—Wealth Management income before taxes rose ~23% with recurring revenue and net inflows remaining high, while Investment Management AUM climbed to a record JPY 136.9 trillion and business revenue hit an all-time high.
• Q4 was softer: group income before taxes fell 20% quarter-on-quarter and net income fell 19% (Q4 income JPY 107.7 billion) amid a Wholesale profit drop, an impairment in Investment Management and a quarter-on-quarter expense increase of ~13% to JPY 469.5 billion.
• Capital and risk posture—CET1 ratio was 12.9% (down 0.1 point); management says balance-sheet growth will be largely self-funded and CET1 should not decline materially, while private credit exposure is modest and diversified at about $2.4 billion.
• Shareholder returns remain supportive with an ordinary Q4 dividend of JPY 24 (annual JPY 51, payout ~41%) and management noting a full‑year total payout including RSUs around 58% and an earlier JPY 60 billion buyback program.

Nomura Trading Down 4.8%

Shares of NYSE NMR traded down $0.40 during midday trading on Friday, hitting $7.87. The stock had a trading volume of 2,020,697 shares, compared to its average volume of 1,922,353. The firm has a market cap of $23.09 billion, a P/E ratio of 9.96, a price-to-earnings-growth ratio of 2.12 and a beta of 0.75. Nomura has a fifty-two week low of $5.45 and a fifty-two week high of $9.58. The company has a debt-to-equity ratio of 7.54, a current ratio of 1.12 and a quick ratio of 1.13. The company's 50-day simple moving average is $8.27 and its 200 day simple moving average is $8.11.

Wall Street Analyst Weigh In

A number of research firms recently weighed in on NMR. JPMorgan Chase & Co. raised Nomura from a "neutral" rating to an "overweight" rating in a report on Thursday, March 19th. Weiss Ratings restated a "hold (c+)" rating on shares of Nomura in a report on Friday, April 10th. One investment analyst has rated the stock with a Strong Buy rating, one has issued a Buy rating and one has issued a Hold rating to the stock. According to MarketBeat.com, the stock currently has a consensus rating of "Buy".

Hedge Funds Weigh In On Nomura

Hedge funds have recently added to or reduced their stakes in the company. Osaic Holdings Inc. raised its holdings in Nomura by 1,019.0% during the 2nd quarter. Osaic Holdings Inc. now owns 6,434 shares of the financial services provider's stock worth $42,000 after purchasing an additional 5,859 shares during the last quarter. UBS AM a distinct business unit of UBS ASSET MANAGEMENT AMERICAS LLC bought a new position in shares of Nomura in the 4th quarter valued at about $76,000. Sei Investments Co. bought a new position in shares of Nomura in the 2nd quarter valued at about $67,000. EP Wealth Advisors LLC acquired a new stake in shares of Nomura during the 2nd quarter worth approximately $72,000. Finally, Atlas Capital Advisors Inc. bought a new stake in shares of Nomura during the fourth quarter worth approximately $92,000. Institutional investors own 15.14% of the company's stock.

About Nomura

Nomura Holdings, Inc is a global financial services group headquartered in Tokyo, Japan, with origins dating back to 1925 when Tokushichi Nomura II established the firm as a securities business. Over the decades Nomura has grown from a domestic securities house into a multinational financial services firm by expanding its product offerings and international footprint. The company is publicly listed and operates through a network of subsidiaries and branches to serve a broad client base.

Nomura's principal businesses encompass retail brokerage, wholesale (investment banking and global markets), and asset management.

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