The merchant banking division was boosted by the sale of its wood and lumber products business, Idaho Timber, the bank said.
The bank said in July it would reduce the size of its merchant banking portfolio that includes investments in real estate, oil and gas, and other public companies as part of a restructuring.
The unit reported a 60% jump in revenue to $397.8 million in the three months ended Aug. 31, Jefferies said, compared with a 32% drop in its crown jewel, the investment banking and capital markets unit.
Investors tend to look at Jefferies' results as a harbinger for Wall Street, since the company reports ahead of its bigger rivals such as JPMorgan Chase & Co, Goldman Sachs Group Inc and Morgan Stanley.
After a stellar run in 2021, U.S. investment banking giants have struggled for most of this year as a market sell-off crushes corporate appetite for dealmaking.
Monetary policy tightening by the U.S. Federal Reserve to tame decades-high inflation and aggressive rhetoric from policymakers have also crushed hopes of any relief in the near term.
Excluding costs tied to a regulatory settlement, New York-based Jefferies earned $1.10 per share, comfortably beating Refinitiv IBES estimate of 73 cents.
Net income tumbled 52%, while revenue slumped 21% from a year earlier.
The company's shares were up 2.7% in extended trading on Wednesday, after closing the regular session 2.3% higher.
(Reporting by Niket Nishant in Bengaluru)