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Eaton Vance Corp.’s (EV - Free Report) fourth-quarter fiscal 2017 (ended Oct 31) adjusted earnings of 70 cents per share lagged the Zacks Consensus Estimate by a penny. However, the bottom line was 23% above the prior-year quarter’s figure.
Results were adversely impacted by a rise in operating expenses. However, higher revenues, growth in assets under management (AUM) and a robust liquidity position supported earnings to some extent.
Net income attributable to shareholders was $82.1 million or 69 cents per share, up from $65.1 million or 57 cents in the year-ago quarter.
For fiscal 2017, adjusted earnings were $2.48 per share, up 16% year over year. The figure also beat the Zacks Consensus Estimate of $2.47. Net income attributable to shareholders was $282.1 million or $2.42 per share, up from $241.3 million or $2.12 per share in the year-ago quarter.
Revenues & Expenses Rise
Total revenues for the quarter amounted to $405.7 million, up 17% year over year. This upside was mainly driven by higher management fees, and distribution and service fees. However, the top line missed the Zacks Consensus Estimate of $409 million.
Total expenses increased 13% from the prior-year quarter to $267.3 million, largely due to higher compensation and related costs, fund-related expenses, distribution expenses and service fee costs.
Total operating income jumped 24% year over year to $138.4 million.
Strong Liquidity Position, AUM Improves
As of Oct 31, 2017, Eaton Vance had $610.6 million in cash and cash equivalents compared with $424.2 million as of Oct 31, 2016. Further, the company had no borrowings outstanding against its new $300 million credit facility.
Eaton Vance’s consolidated AUM climbed 26% from the year-ago quarter to $422.3 billion, reflecting net inflows of $37.8 billion and a market price appreciation of $38.2 billion. Further, the company’s acquisition of Calvert Investment Management’s business assets added $9.9 billion to consolidated AUM.
Share Repurchase
During fiscal 2017, Eaton Vance repurchased nearly 2.9 million shares of its Non-Voting Common Stock for $126.2 million under its existing repurchase authorization.
Our Viewpoint
Eaton Vance’s improving AUM along with revenue rise is likely to support its growth in the quarters ahead. However, rising expenses remain a major headwind.
Eaton Vance Corporation Price, Consensus and EPS Surprise
The Blackstone Group L.P. (BX - Free Report) reported third-quarter 2017 economic net income of 69 cents per share, surpassing the Zacks Consensus Estimate of 57 cents. Improvement in revenues largely boosted earnings. However, a rise in expenses was an undermining factor.
BlackRock, Inc. (BLK - Free Report) reported third-quarter 2017 adjusted earnings of $5.92 per share, which outpaced the Zacks Consensus Estimate of $5.59. Results benefited from revenue growth, rise in AUM and steady long-term inflows. However, increase in operating expenses acted as a headwind.
Waddell & Reed Financial Inc.’s third-quarter 2017 earnings of 45 cents per share exceeded the Zacks Consensus Estimate of 40 cents. Higher gross sales and a decline in net outflows marginally supported the results. However, lower revenues and a rise in expenses were the undermining factors.
Wall Street’s Next Amazon
Zacks EVP Kevin Matras believes this familiar stock has only just begun its climb to become one of the greatest investments of all time. It’s a once-in-a-generation opportunity to invest in pure genius.
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Eaton Vance (EV) Q4 Earnings & Revenues Lag, Expenses Rise
Eaton Vance Corp.’s (EV - Free Report) fourth-quarter fiscal 2017 (ended Oct 31) adjusted earnings of 70 cents per share lagged the Zacks Consensus Estimate by a penny. However, the bottom line was 23% above the prior-year quarter’s figure.
Results were adversely impacted by a rise in operating expenses. However, higher revenues, growth in assets under management (AUM) and a robust liquidity position supported earnings to some extent.
Net income attributable to shareholders was $82.1 million or 69 cents per share, up from $65.1 million or 57 cents in the year-ago quarter.
For fiscal 2017, adjusted earnings were $2.48 per share, up 16% year over year. The figure also beat the Zacks Consensus Estimate of $2.47. Net income attributable to shareholders was $282.1 million or $2.42 per share, up from $241.3 million or $2.12 per share in the year-ago quarter.
Revenues & Expenses Rise
Total revenues for the quarter amounted to $405.7 million, up 17% year over year. This upside was mainly driven by higher management fees, and distribution and service fees. However, the top line missed the Zacks Consensus Estimate of $409 million.
Total expenses increased 13% from the prior-year quarter to $267.3 million, largely due to higher compensation and related costs, fund-related expenses, distribution expenses and service fee costs.
Total operating income jumped 24% year over year to $138.4 million.
Strong Liquidity Position, AUM Improves
As of Oct 31, 2017, Eaton Vance had $610.6 million in cash and cash equivalents compared with $424.2 million as of Oct 31, 2016. Further, the company had no borrowings outstanding against its new $300 million credit facility.
Eaton Vance’s consolidated AUM climbed 26% from the year-ago quarter to $422.3 billion, reflecting net inflows of $37.8 billion and a market price appreciation of $38.2 billion. Further, the company’s acquisition of Calvert Investment Management’s business assets added $9.9 billion to consolidated AUM.
Share Repurchase
During fiscal 2017, Eaton Vance repurchased nearly 2.9 million shares of its Non-Voting Common Stock for $126.2 million under its existing repurchase authorization.
Our Viewpoint
Eaton Vance’s improving AUM along with revenue rise is likely to support its growth in the quarters ahead. However, rising expenses remain a major headwind.
Eaton Vance Corporation Price, Consensus and EPS Surprise
Eaton Vance Corporation Price, Consensus and EPS Surprise | Eaton Vance Corporation Quote
Eaton Vance carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Performance of Other Asset Managers
The Blackstone Group L.P. (BX - Free Report) reported third-quarter 2017 economic net income of 69 cents per share, surpassing the Zacks Consensus Estimate of 57 cents. Improvement in revenues largely boosted earnings. However, a rise in expenses was an undermining factor.
BlackRock, Inc. (BLK - Free Report) reported third-quarter 2017 adjusted earnings of $5.92 per share, which outpaced the Zacks Consensus Estimate of $5.59. Results benefited from revenue growth, rise in AUM and steady long-term inflows. However, increase in operating expenses acted as a headwind.
Waddell & Reed Financial Inc.’s third-quarter 2017 earnings of 45 cents per share exceeded the Zacks Consensus Estimate of 40 cents. Higher gross sales and a decline in net outflows marginally supported the results. However, lower revenues and a rise in expenses were the undermining factors.
Wall Street’s Next Amazon
Zacks EVP Kevin Matras believes this familiar stock has only just begun its climb to become one of the greatest investments of all time. It’s a once-in-a-generation opportunity to invest in pure genius.
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