Earnings Call: Cohen & Company Reveals Q3 2024 Financial Results

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Earnings Call: Cohen & Company Reveals Q3 2024 Financial Results

Cohen & Company, Inc. (Symbol: COHN) has released its financial results for the third quarter of 2024. The company reported a significant recovery with a net profit of $2.2 million, or earnings of $1.31 per fully diluted share, compared to the net loss recorded in the previous quarter and the same period last year. The company’s adjusted pre-tax income improved significantly, reaching $7.7 million in this quarter compared to reported losses in prior periods. Cohen & Company Capital Markets (CCM), the company’s investment banking operation, generated $21.4 million in advisory fees during the quarter and led a SPAC initial public offering (IPO). Despite fluctuations in the SPAC market affecting the company’s core investment portfolio, management remains optimistic about future profit potential and is committed to creating value for shareholders by continuing quarterly dividend payments.

Key Points:

  • $2.2 million net profit in Q3 2024, a positive change from losses in previous quarters.
  • $7.7 million adjusted pre-tax income, a significant increase compared to last year's loss.
  • CCM generated $21.4 million in advisory fees and led a SPAC IPO.
  • The company experienced fluctuations in its core investment portfolio due to the SPAC market.
  • Cohen & Company continues to focus on long-term value creation for shareholders and is committed to maintaining its quarterly dividend.

Company Outlook: Positive trends from the first half of the year continued into the third quarter. CCM is expected to sustain its strong performance and momentum through year-end. The company is committed to increasing shareholder value with sustainable long-term profit potential.

Negative Highlights:

  • Ongoing negative market value corrections in the core investment portfolio.
  • Expectations of continued fluctuations in core portfolio and operational results.

Positive Highlights:

  • Strong performance from CCM, solid backlog, and consistent production expectations.
  • Improvement in net profit and adjusted pre-tax income compared to previous quarters.
  • Positive trends in net trading income and asset management income.

Underperforming Areas:

  • $1.7 million negative outcome in core operations and other income due to declines in the stock values of SPACs post-merger.
  • $700,000 loss from investments valued using the equity method.

Q&A Highlights: During the Q&A session, investor questions were addressed, and it was mentioned that further inquiries could be directed to Joe Pooler at investorrelations@cohenandcompany.com.

Cohen & Company’s third-quarter earnings reflect a recovery and progress characterized by a return to profitability and improvement in adjusted pre-tax income. The investment banking division, CCM, played a significant role in this quarter’s success by obtaining substantial advisory income and leading a SPAC IPO. Despite the challenges posed by the SPAC market, Cohen & Company is positioned to continue its positive trajectory while maintaining its commitment to shareholder value and dividends. The company management encourages investors with further questions to reach out to the investor relations representative.

InvestingPro Forecasts: Cohen & Company’s recent financial results are further illuminated by InvestingPro's real-time data. The company’s revenue for the twelve months ending Q2 2024 was reported at $74.55 million, marking a significant 21.1% income increase during the same period. This growth aligns with the positive trends reported in Cohen & Company’s Q3 earnings.

InvestingPro Tips emphasize the company’s strong financial performance beyond quarterly results. The company exhibited significant returns, with a total return of 19.06% in the past week. This short-term gain complements an impressive long-term performance validated by a 81.21% price total return over the last year and a 54.49% return over the last six months.

A particularly noteworthy InvestingPro Tip is that Cohen & Company made "a significant dividend payment to shareholders," which is supported by a current dividend yield of 10.07%, highlighting the company’s commitment to creating value for shareholders as noted in the earnings report.

For investors seeking a more comprehensive analysis, InvestingPro offers seven additional tips that provide deeper insights into Cohen & Company's financial health and market position.

As another InvestingPro Tip indicates, the company’s recent twelve-month profits validate the positive net income reported in the Q3 results of 2024. This profitability, coupled with strong returns across various timelines, suggests that Cohen & Company can sustain its positive momentum despite the fluctuations in the SPAC market affecting its core investment portfolio.