Investment Banking Sales Drop Hurts KBW

Fourth quarter net income fell to $3.6 million, or 11 cents per share, from $25.4 million, or 87 cents per share, during the same period the previous year.

Fourth-quarter earnings included charges from restricted stock awards tied to KBW's initial public offering in 2006. Excluding those charges, earnings were $5.3 million, or 17 cents per share.

Analysts polled by Thomson Financial, on average, forecast earnings of 34 cents per share during the quarter on revenue of $108 million. Analysts do not always include special charges in their estimates.

Revenue totaled $105.4 million during the quarter.

Investment banking revenue tumbled 22 percent to $52.4 million, pushing earnings lower during the fourth quarter. Principal transactions resulted in a loss of $4.4 million in the quarter, after boosting revenue $10.5 million during the year-ago period.

For the full year, earnings totaled $27.3 million, or 86 cents per share, compared with $53.3 million, or $1.93 per share in 2006. Revenue rose to $226.5 million, from $210 million a year earlier.