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Affiliated Managers (AMG) Q2 Earnings: What's in Store?
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Affiliated Managers Group Inc. (AMG - Free Report) is scheduled to report second-quarter 2016 results on Monday, Aug 1, before the market opens.
Last quarter, Affiliated Managers’ earnings met the Zacks Consensus Estimate. Results exhibited a decrease in operating expenses, offset by a fall in revenues.
However, this failed to translate into a bullish share price movement, with Affiliated Managers' stock declining over 15% during the three months ended Jun 30, 2016. This was perhaps partially due to the Brexit concerns. Moreover, overall operating environment remained tough as well.
Further, analysts don’t seem to be happy with the company’s performance in the just concluded quarter. Affiliated Managers witnessed five downward revisions in earnings estimates (versus no upward revision) over the last 30 days. Also, the Zacks Consensus Estimate of $3.01 declined by a penny over the last seven days.
Nonetheless, Affiliated Managers boasts a decent earnings surprise history, as evident from the chart below:
Our proven model does not conclusively show that Affiliated Managers is likely to beat earnings in the second quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy) or #2 (Buy) or at least #3 (Hold) to have a significantly higher chance of beating earnings.
Zacks ESP: The Earnings ESP for Affiliated Managers is 0.00%. This is because both the Most Accurate estimate and the Zacks Consensus Estimate stand at $3.01.
Zacks Rank: Affiliated Managers’ Zacks Rank #3 increases the predictive power of ESP. But we need a positive ESP to be confident of an earnings beat.
Factors at Play
Will Affiliated Managers be able to surpass the earnings estimates this time? Or will a tough industry backdrop hurt the bottom line? Let’s check the factors that are expected to influence Q2 results.
Affiliated Managers holds an almost unbeaten track record of buying equity interests in asset management companies with strong performance-oriented products. Though during the quarter, the company did not complete any announced deals, we believe past equity investments should continue to boost the company’s top line, driven by the excellent long-term performance of its affiliates.
On the performance fees front, management expects growth in the existing alternative products along with the addition of the new products to aid performance fee to grow modestly as a percentage of the earnings base in 2016. This should be reflected in the upcoming release as well.
Also, management estimates the ratio of earnings before interest, taxes, depreciation and amortization (“EBITDA”) contribution at end-of-period assets under management for the quarter to be around 13.5 basis points. Further, the company projects other economic items to be around $1 million per quarter.
Further, net inflows are expected to get impetus in the upcoming quarters with flows broadly disturbed across channels and diverse in terms of product category.
On the cost front, Affiliated Managers expects total interest expenses and amortization expenses to remain stable sequentially at $22.0 million and $34 million, respectively in the quarter. Additionally, intangible-related deferred taxes are expected to be $22.0 million.
Stocks That Warrant a Look
Here are some stocks worth considering, as according to our model they have the right combination of elements to post an earnings beat this quarter.
Western Asset Mortgage Capital Corporation has an Earnings ESP of +13.33% and a Zacks Rank #3. It is scheduled to report on Aug 3.
Earnings ESP for Golub Capital BDC, Inc. (GBDC - Free Report) is +3.23% and it has a Zacks Rank #3. The company is slated to report on Aug 3.
Prudential Financial, Inc. (PRU - Free Report) has an Earnings ESP of +0.40% and a Zacks Rank #3. It is scheduled to report results on Aug 3.
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Affiliated Managers (AMG) Q2 Earnings: What's in Store?
Affiliated Managers Group Inc. (AMG - Free Report) is scheduled to report second-quarter 2016 results on Monday, Aug 1, before the market opens.
Last quarter, Affiliated Managers’ earnings met the Zacks Consensus Estimate. Results exhibited a decrease in operating expenses, offset by a fall in revenues.
However, this failed to translate into a bullish share price movement, with Affiliated Managers' stock declining over 15% during the three months ended Jun 30, 2016. This was perhaps partially due to the Brexit concerns. Moreover, overall operating environment remained tough as well.
Further, analysts don’t seem to be happy with the company’s performance in the just concluded quarter. Affiliated Managers witnessed five downward revisions in earnings estimates (versus no upward revision) over the last 30 days. Also, the Zacks Consensus Estimate of $3.01 declined by a penny over the last seven days.
Nonetheless, Affiliated Managers boasts a decent earnings surprise history, as evident from the chart below:
AFFIL MANAGERS Price and EPS Surprise
AFFIL MANAGERS Price and EPS Surprise | AFFIL MANAGERS Quote
Earnings Whispers
Our proven model does not conclusively show that Affiliated Managers is likely to beat earnings in the second quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy) or #2 (Buy) or at least #3 (Hold) to have a significantly higher chance of beating earnings.
Zacks ESP: The Earnings ESP for Affiliated Managers is 0.00%. This is because both the Most Accurate estimate and the Zacks Consensus Estimate stand at $3.01.
Zacks Rank: Affiliated Managers’ Zacks Rank #3 increases the predictive power of ESP. But we need a positive ESP to be confident of an earnings beat.
Factors at Play
Will Affiliated Managers be able to surpass the earnings estimates this time? Or will a tough industry backdrop hurt the bottom line? Let’s check the factors that are expected to influence Q2 results.
Affiliated Managers holds an almost unbeaten track record of buying equity interests in asset management companies with strong performance-oriented products. Though during the quarter, the company did not complete any announced deals, we believe past equity investments should continue to boost the company’s top line, driven by the excellent long-term performance of its affiliates.
On the performance fees front, management expects growth in the existing alternative products along with the addition of the new products to aid performance fee to grow modestly as a percentage of the earnings base in 2016. This should be reflected in the upcoming release as well.
Also, management estimates the ratio of earnings before interest, taxes, depreciation and amortization (“EBITDA”) contribution at end-of-period assets under management for the quarter to be around 13.5 basis points. Further, the company projects other economic items to be around $1 million per quarter.
Further, net inflows are expected to get impetus in the upcoming quarters with flows broadly disturbed across channels and diverse in terms of product category.
On the cost front, Affiliated Managers expects total interest expenses and amortization expenses to remain stable sequentially at $22.0 million and $34 million, respectively in the quarter. Additionally, intangible-related deferred taxes are expected to be $22.0 million.
Stocks That Warrant a Look
Here are some stocks worth considering, as according to our model they have the right combination of elements to post an earnings beat this quarter.
Western Asset Mortgage Capital Corporation has an Earnings ESP of +13.33% and a Zacks Rank #3. It is scheduled to report on Aug 3.
Earnings ESP for Golub Capital BDC, Inc. (GBDC - Free Report) is +3.23% and it has a Zacks Rank #3. The company is slated to report on Aug 3.
Prudential Financial, Inc. (PRU - Free Report) has an Earnings ESP of +0.40% and a Zacks Rank #3. It is scheduled to report results on Aug 3.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report >>