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Wachovia analyst sees LaBranche mandatory as still attractive, at 2.25% cheap
Nashville, Jan. 17 - LaBranche & Co. Inc.'s announced dividend shaves some valuation off the 6.75% mandatory, but Wachovia Securities, Inc. convertible analyst Kimberlee Brody said it still looks attractive.
In addition to reporting earnings Friday, LaBranche declared an 8c per share common dividend.
"This common dividend declaration equates to a $0.56 difference in DXB's [the mandatory] valuation," Brody said in a report Friday.
"DXB is still attractively priced. At $27.25 versus $26.01, DXB is 2.25% cheap," she added, noting that the DECS universe is currently fairly valued.
LaBranche reported net income of $22 million, or 36c per diluted share, up from $18 million, or 30c, in fourth quarter 2001. Revenues slipped to $114 million from $124 million.
Results for 2002 reflect the implementation of the new accounting rule under which acquired goodwill and other intangible assets are no longer amortized, the company pointed out. Had the rule been effective for 2001, the company said net in the 2001 fourth quarter would have been $26 million, or 43c per diluted share.
For the year, net income increased to $80 million, or $1.34 per diluted share, from $64 million, or $1.13 per diluted share, in 2001. Revenues grew to $453 million from $424 million. Had the new accounting rule been in effect in 2001, net income would have been $93 million, or $1.62 per diluted share.
Separately, LaBranche also announced that four inside members of its board of directors - James G. Gallagher, S. Lawrence Prendergast, George E. Robb, Jr. and Harvey S. Traison - have agreed to resign as part of LaBranche's effort to comply with the Sarbanes-Oxley Act of 2002 and related NYSE proposed rule changes.
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