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Why Is Invesco (IVZ) Up 27.9% Since Last Earnings Report?
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A month has gone by since the last earnings report for Invesco (IVZ - Free Report) . Shares have added about 27.9% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Invesco due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.
Invesco Q3 Earnings Miss Estimates, AUM Balance Down
Invesco’s third-quarter 2022 adjusted earnings of 34 cents per share have missed the Zacks Consensus Estimate of 43 cents by a significant margin. The bottom line plunged 55.8% from the prior-year quarter. Our estimate for earnings was 49 cents.
Results have been adversely impacted by lower assets under management (AUM) balance and long-term outflows, which hurt revenues. However, a decline in operating expenses was a tailwind.
On a GAAP basis, net income attributable to common shareholders was $177.4 million or 39 cents per share, down from $330.1 million or 71 cents per share a year ago.
Revenues & Expenses Decline
Adjusted net revenues were $1.11 billion, falling 16.7% year over year. The top line lagged the Zacks Consensus Estimate of $1.14 billion. Our estimate for revenues was $1.16 billion.
Adjusted operating expenses were $741.2 million, down 4% year over year.
The adjusted operating margin was 33.3%, down from 42.1% a year ago.
AUM Balance Falls
As of Sep 30, 2022, AUM was $1.32 trillion, which declined 13.4% year over year. Average AUM at the third-quarter end totaled $1.42 trillion, down 8.1%.
The company witnessed long-term net outflows of $7.7 billion in the quarter.
Balance Sheet Strong
As of Sep 30, 2022, cash and cash equivalents were $1.02 billion compared with $1.90 billion as of Dec 31, 2021.
Long-term debt amounted to $1.49 billion. The credit facility balance was $0 as of Sep 30, 2022.
Outlook
Money market fee waivers are not expected to materially impact Invesco’s revenues going forward.
For the fourth quarter, the non-GAAP effective tax rate is expected to be 26-28%.
How Have Estimates Been Moving Since Then?
It turns out, estimates revision have trended downward during the past month.
The consensus estimate has shifted -23.42% due to these changes.
VGM Scores
Currently, Invesco has a subpar Growth Score of D, though it is lagging a bit on the Momentum Score front with an F. Charting a somewhat similar path, the stock was allocated a grade of D on the value side, putting it in the bottom 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of D. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. It's no surprise Invesco has a Zacks Rank #5 (Strong Sell). We expect a below average return from the stock in the next few months.
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Why Is Invesco (IVZ) Up 27.9% Since Last Earnings Report?
A month has gone by since the last earnings report for Invesco (IVZ - Free Report) . Shares have added about 27.9% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Invesco due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.
Invesco Q3 Earnings Miss Estimates, AUM Balance Down
Invesco’s third-quarter 2022 adjusted earnings of 34 cents per share have missed the Zacks Consensus Estimate of 43 cents by a significant margin. The bottom line plunged 55.8% from the prior-year quarter. Our estimate for earnings was 49 cents.
Results have been adversely impacted by lower assets under management (AUM) balance and long-term outflows, which hurt revenues. However, a decline in operating expenses was a tailwind.
On a GAAP basis, net income attributable to common shareholders was $177.4 million or 39 cents per share, down from $330.1 million or 71 cents per share a year ago.
Revenues & Expenses Decline
Adjusted net revenues were $1.11 billion, falling 16.7% year over year. The top line lagged the Zacks Consensus Estimate of $1.14 billion. Our estimate for revenues was $1.16 billion.
Adjusted operating expenses were $741.2 million, down 4% year over year.
The adjusted operating margin was 33.3%, down from 42.1% a year ago.
AUM Balance Falls
As of Sep 30, 2022, AUM was $1.32 trillion, which declined 13.4% year over year. Average AUM at the third-quarter end totaled $1.42 trillion, down 8.1%.
The company witnessed long-term net outflows of $7.7 billion in the quarter.
Balance Sheet Strong
As of Sep 30, 2022, cash and cash equivalents were $1.02 billion compared with $1.90 billion as of Dec 31, 2021.
Long-term debt amounted to $1.49 billion. The credit facility balance was $0 as of Sep 30, 2022.
Outlook
Money market fee waivers are not expected to materially impact Invesco’s revenues going forward.
For the fourth quarter, the non-GAAP effective tax rate is expected to be 26-28%.
How Have Estimates Been Moving Since Then?
It turns out, estimates revision have trended downward during the past month.
The consensus estimate has shifted -23.42% due to these changes.
VGM Scores
Currently, Invesco has a subpar Growth Score of D, though it is lagging a bit on the Momentum Score front with an F. Charting a somewhat similar path, the stock was allocated a grade of D on the value side, putting it in the bottom 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of D. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. It's no surprise Invesco has a Zacks Rank #5 (Strong Sell). We expect a below average return from the stock in the next few months.