(Reuters) - Financial advisory firm and asset manager Lazard Ltd reported a worse-than-expected 35 percent drop in adjusted quarterly profit as volatile global markets slowed dealmaking.
Sliding oil prices, worries about the Chinese economy and uncertainty about U.S. interest rates made for wobbly markets early in the year, spooking traders and investors.
Industry-wide, investment banking fees fell 29 percent in the period, the worst first-quarter since 2009, according to Thomson Reuters data.
"The deal market was a little quieter than last year," Chief Executive Kenneth Jacobs told Reuters on Thursday.
"M&A cycles don't move in a straight line and we are in one of those periods of cycles, but the cycle still has some room to grow, just maybe not at the same levels we saw in 2015."
Lazard's shares, which up to Wednesday had shed about 9 percent this year, were down about 1.7 percent at $38.90 in premarket trading.
The company's adjusted net income fell to $66.8 million, or 50 cents per share, in the quarter ended March 31 from $103 million, or 77 cents per share, a year earlier.
Analysts on average had expected a profit of 65 cents per share, according to Thomson Reuters I/B/E/S. Operating revenue declined 12.9 percent to $506.1 million.
However, net income attributable to Lazard rose to $66.8 million, or 50 cents per share, from about $56 million, or 42 cents per share, a year earlier.
Operating costs fell 21 percent in the quarter as the firm cut compensation expenses.
Lazard worked on a number of mega deals in the quarter, including Dow Chemical (NYSE:DOW) Co's $130 billion merger with DuPont (NYSE:DD), Anheuser Busch InBev's $106 billion acquisition of SABMiller (LON:SAB) Plc and Dell Inc's (DI.UL) $67.0 billion acquisition of EMC Corp (NYSE:EMC).
Still, Lazard's M&A and other advisory fees fell 18 percent to $214.6 million in the period.
The company raised its quarterly dividend to 38 cents per share from 35.
Asset management revenue fell 12 percent to $239.6 million in the period. Average assets under management were $190.6 billion at March 31, up 2.2 percent from Dec. 31.