Jefferies reported a $39 million profit for Q4 of 2011, and annual earnings of $232mn - slightly above the prior year's $224mn.  Jefferies earnings for the 3 months ended 11/30/11 beat analyst expectations. Jefferies quarterly results had been anxiously awaited by analysts and investors - given all the pressure that the bank has been under the past few weeks, relating to its European sovereign debt holdings.  Investors have sold off the firm's shares, dropping share prices by nearly 20% since 10/31.  That's when MF Global filed for bankruptcy protection after its outsized bets on European bonds prompted a run on the bank. Eager to avoid becoming the next victim of a European scare, Jefferies has engaged in public relations, detailing its sovereign holdings and slashing its inventory to demonstrate a liquid balance sheet.  Top executives have also stridently battled against purported rumormongers, allegedly spreading lies about the firm’s financial position. Analyst Conference Call. Peregrine Broadbent, CFO,  said "truth has defeated misinformation," a reference to rating agency Egan-Jones that had threatened to cut Jefferies’s credit grade because it said the firm needed to shore up its balance sheet. CEO Richard Handler also noted that the CFTC conducted a 2-day review at Jefferies, to see if accounts were properly segregated -- and the firm passed. Analysts have praised Jefferies candor and risk management as signs of a firm stronger and more careful than MF Global.  But some of these analysts have added that they were concerned that Jefferies might have taken those lessons a bit far, shedding too much risk to build up a safety cushion. Indication of Other Firms' Earnings Announcements. Jefferies quarterly and annual results is likely to foreshadow what lies ahead for its larger peers.  While banks have said that the 4th quarter reflected a rebound from a particularly ugly 3rd quarter, both investment banking and trading businesses are expected to have improved only slightly.   [NY Times 12/20/11]