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Invesco (IVZ) Down on Q1 Earnings Miss, Dividend Up by 10%
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Invesco’s (IVZ - Free Report) first-quarter 2022 adjusted earnings of 56 cents per share missed the Zacks Consensus Estimate of 61 cents. The bottom line declined 17.6% from the prior-year quarter.
Shares of IVZ lost 1.4% in the pre-market trading in response to lower-than-expected quarterly performance. The full-day trading session will display a clearer picture.
Results were adversely impacted by a rise in operating expenses. However, improvement in revenues and solid growth in assets under management (AUM) balance act as tailwinds.
On a GAAP basis, net income attributable to common shareholders was $197.7 million or 43 cents per share, down from $267.8 million or 58 cents per share a year ago.
Revenues & Expenses Rise
GAAP operating revenues were $1.63 billion, growing 1.8% year over year. The top line easily beat the Zacks Consensus Estimate of $1.29 billion. Adjusted net revenues increased marginally to $1.25 billion.
Adjusted operating expenses were $757.8 million, up 1.3% from the prior-year quarter.
Invesco achieved 96% of the targeted $200 million or $193 million in annualized net savings at the end of the reported quarter.
Adjusted operating margin was 39.5%, down from 40.2% a year ago.
AUM Balance Improves
As of Mar 31, 2022, AUM was $1.56 trillion, which grew 10.8% year over year. Average AUM at first-quarter end totaled $1.55 trillion, up 10.8%.
The company witnessed long-term net inflows of $17.2 billion during the quarter.
Strong Balance Sheet
As of Mar 31, 2022, cash and cash equivalents were $1.31 billion, down 30.9% sequentially. Further, long-term debt amounted to $2.09 billion.
Capital Deployments
During the first quarter, IVZ repurchased the previously announced $200 million worth of its shares.
Concurrently, Invesco announced a 10% hike in quarterly dividend. The dividend of 18.75 cents per share will be paid out on Jun 2 to shareholders on record as of May 10.
Our View
Invesco remains well poised to benefit from its global footprint, product offerings and strategic buyouts. However, elevated expenses and high debt levels are major concerns.
BlackRock, Inc.’s (BLK - Free Report) first-quarter 2022 adjusted earnings of $9.52 per share outpaced the Zacks Consensus Estimate of $8.92. The figure reflects a rise of 18.4% from the year-ago quarter.
BLK’s results benefited from an improvement in revenues, partly offset by higher expenses. Moreover, long-term net inflows supported growth in the AUM balance.
SEI Investments Co.’s (SEIC - Free Report) first-quarter 2022 earnings of $1.36 per share were in line with the Zacks Consensus Estimate. The bottom line reflects a 53% jump from the prior-year quarter. The reported quarter comprised a one-time early termination fee of $88 million or 47 cents per share, which was included in information processing and software servicing fees.
SEIC’s Results were aided by revenue growth and an increase in AUM balance. These were offset by a rise in expenses.
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Invesco (IVZ) Down on Q1 Earnings Miss, Dividend Up by 10%
Invesco’s (IVZ - Free Report) first-quarter 2022 adjusted earnings of 56 cents per share missed the Zacks Consensus Estimate of 61 cents. The bottom line declined 17.6% from the prior-year quarter.
Shares of IVZ lost 1.4% in the pre-market trading in response to lower-than-expected quarterly performance. The full-day trading session will display a clearer picture.
Results were adversely impacted by a rise in operating expenses. However, improvement in revenues and solid growth in assets under management (AUM) balance act as tailwinds.
On a GAAP basis, net income attributable to common shareholders was $197.7 million or 43 cents per share, down from $267.8 million or 58 cents per share a year ago.
Revenues & Expenses Rise
GAAP operating revenues were $1.63 billion, growing 1.8% year over year. The top line easily beat the Zacks Consensus Estimate of $1.29 billion. Adjusted net revenues increased marginally to $1.25 billion.
Adjusted operating expenses were $757.8 million, up 1.3% from the prior-year quarter.
Invesco achieved 96% of the targeted $200 million or $193 million in annualized net savings at the end of the reported quarter.
Adjusted operating margin was 39.5%, down from 40.2% a year ago.
AUM Balance Improves
As of Mar 31, 2022, AUM was $1.56 trillion, which grew 10.8% year over year. Average AUM at first-quarter end totaled $1.55 trillion, up 10.8%.
The company witnessed long-term net inflows of $17.2 billion during the quarter.
Strong Balance Sheet
As of Mar 31, 2022, cash and cash equivalents were $1.31 billion, down 30.9% sequentially. Further, long-term debt amounted to $2.09 billion.
Capital Deployments
During the first quarter, IVZ repurchased the previously announced $200 million worth of its shares.
Concurrently, Invesco announced a 10% hike in quarterly dividend. The dividend of 18.75 cents per share will be paid out on Jun 2 to shareholders on record as of May 10.
Our View
Invesco remains well poised to benefit from its global footprint, product offerings and strategic buyouts. However, elevated expenses and high debt levels are major concerns.
Invesco Ltd. Price, Consensus and EPS Surprise
Invesco Ltd. price-consensus-eps-surprise-chart | Invesco Ltd. Quote
Currently, IVZ carries a Zacks Rank #4 (Sell).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Performance of Other Asset Managers
BlackRock, Inc.’s (BLK - Free Report) first-quarter 2022 adjusted earnings of $9.52 per share outpaced the Zacks Consensus Estimate of $8.92. The figure reflects a rise of 18.4% from the year-ago quarter.
BLK’s results benefited from an improvement in revenues, partly offset by higher expenses. Moreover, long-term net inflows supported growth in the AUM balance.
SEI Investments Co.’s (SEIC - Free Report) first-quarter 2022 earnings of $1.36 per share were in line with the Zacks Consensus Estimate. The bottom line reflects a 53% jump from the prior-year quarter. The reported quarter comprised a one-time early termination fee of $88 million or 47 cents per share, which was included in information processing and software servicing fees.
SEIC’s Results were aided by revenue growth and an increase in AUM balance. These were offset by a rise in expenses.