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Moelis & Company (MC) Q4 Earnings Beat on Higher Revenues
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Moelis & Company’s (MC - Free Report) fourth-quarter adjusted earnings of 77 cents per share surpassed the Zacks Consensus Estimate of 67 cents. The earnings figure also reflects an improvement of 48% from the prior-year quarter.
The company’s quarterly performance benefited from growth in revenues as M&A activities continued to increase. However, higher expenses acted as a headwind.
Net income for the reported quarter (GAAP basis) was $56 million, compared to a loss of $5.7 million in the prior-year quarter.
Adjusted earnings per share for 2018 came in at $3.00, up 31% from the prior year. The figure also outpaced the Zacks Consensus Estimate of $2.92. Net income (GAAP Basis) for the year was $208 million compared with $126.5 million recorded in 2017.
Revenues Improve, Costs Rise
Total revenues for the quarter jumped 41% year over year to $238.3 million. This rise was mainly driven by strength in M&A-related activity and higher average fees per completed transaction. However, the top-line figure missed the Zacks Consensus Estimate of $240.4 million.
Total revenues for 2018 climbed 29% year over year to $885.8 million. The upside stemmed primarily from growth in all products, including capital markets and private fund advisory, with significant strength in M&A-related activity and higher average fees per completed transaction. Further, the reported figure outpaced the Zacks Consensus Estimate of $873.1 million.
Total operating expenses for the quarter (adjusted basis) came in at $174.2 million, rising 35% year over year. Increase in compensation and non-compensation costs led to this upswing.
Other income (adjusted basis) was $1.3 million, significantly lower than $10.1 million recorded in the year-ago quarter.
As of Dec 31, 2018, Moelis & Company had cash and liquid investments of $341.6 million.
Capital Deployment
On Feb 5, the company declared a special dividend of $1.25 per share and also increased the regular quarterly dividend to 50cents per share (up 6% from prior payout). The dividend of $1.75 per share will be paid on Mar 29 to common shareholders of record on Feb 19.
Further, the company authorized the repurchase of up to $100 million of shares of Class A common stock of Moelis &Company and/or Class A partnership units of Moelis & Company Group LP with no expiration date.
Our Take
The company’s global expansion initiatives, along with strategic partnerships in Japan, Australia and Mexico, will likely continue supporting its top line. Also, a favorable operating environment, diversification across sectors and strong liquidity position will be conducive to its growth. However, rising operating expenses are expected to hurt the company’s profitability to some extent.
Moelis & Company Price, Consensus and EPS Surprise
Performances of Other Investment Management Stocks
BlackRock, Inc.’s (BLK - Free Report) fourth-quarter 2018 adjusted earnings of $6.08 per share missed the Zacks Consensus Estimate of $6.39. Further, the figure came in 2% lower than the year-ago tally.
Invesco (IVZ - Free Report) reported fourth-quarter 2018 adjusted earnings of 44 cents per share, lagging the Zacks Consensus Estimate of 56 cents. Also, the figure came in 39.7% lower than the prior-year quarter level.
Blackstone (BX - Free Report) posted fourth-quarter 2018 net loss of 2 cents per unit. The Zacks Consensus Estimate for earnings was pegged at 3 cents. Additionally, the reported figure reflected a decline from 45 cents earned in the prior-year quarter.
Zacks' Top 10 Stocks for 2019
In addition to the stocks discussed above, wouldn't you like to know about our 10 finest buy-and-holds for the year?
From more than 4,000 companies covered by the Zacks Rank, these 10 were picked by a process that consistently beats the market. Even during 2018 while the market dropped -5.2%, our Top 10s were up well into double-digits. And during bullish 2012 – 2017, they soared far above the market's +126.3%, reaching +181.9%.
This year, the portfolio features a player that thrives on volatility, an AI comer, and a dynamic tech company that helps doctors deliver better patient outcomes at lower costs.
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Moelis & Company (MC) Q4 Earnings Beat on Higher Revenues
Moelis & Company’s (MC - Free Report) fourth-quarter adjusted earnings of 77 cents per share surpassed the Zacks Consensus Estimate of 67 cents. The earnings figure also reflects an improvement of 48% from the prior-year quarter.
The company’s quarterly performance benefited from growth in revenues as M&A activities continued to increase. However, higher expenses acted as a headwind.
Net income for the reported quarter (GAAP basis) was $56 million, compared to a loss of $5.7 million in the prior-year quarter.
Adjusted earnings per share for 2018 came in at $3.00, up 31% from the prior year. The figure also outpaced the Zacks Consensus Estimate of $2.92. Net income (GAAP Basis) for the year was $208 million compared with $126.5 million recorded in 2017.
Revenues Improve, Costs Rise
Total revenues for the quarter jumped 41% year over year to $238.3 million. This rise was mainly driven by strength in M&A-related activity and higher average fees per completed transaction. However, the top-line figure missed the Zacks Consensus Estimate of $240.4 million.
Total revenues for 2018 climbed 29% year over year to $885.8 million. The upside stemmed primarily from growth in all products, including capital markets and private fund advisory, with significant strength in M&A-related activity and higher average fees per completed transaction. Further, the reported figure outpaced the Zacks Consensus Estimate of $873.1 million.
Total operating expenses for the quarter (adjusted basis) came in at $174.2 million, rising 35% year over year. Increase in compensation and non-compensation costs led to this upswing.
Other income (adjusted basis) was $1.3 million, significantly lower than $10.1 million recorded in the year-ago quarter.
As of Dec 31, 2018, Moelis & Company had cash and liquid investments of $341.6 million.
Capital Deployment
On Feb 5, the company declared a special dividend of $1.25 per share and also increased the regular quarterly dividend to 50cents per share (up 6% from prior payout). The dividend of $1.75 per share will be paid on Mar 29 to common shareholders of record on Feb 19.
Further, the company authorized the repurchase of up to $100 million of shares of Class A common stock of Moelis &Company and/or Class A partnership units of Moelis & Company Group LP with no expiration date.
Our Take
The company’s global expansion initiatives, along with strategic partnerships in Japan, Australia and Mexico, will likely continue supporting its top line. Also, a favorable operating environment, diversification across sectors and strong liquidity position will be conducive to its growth. However, rising operating expenses are expected to hurt the company’s profitability to some extent.
Moelis & Company Price, Consensus and EPS Surprise
Moelis & Company Price, Consensus and EPS Surprise | Moelis & Company Quote
Currently, Moelis & Company carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Performances of Other Investment Management Stocks
BlackRock, Inc.’s (BLK - Free Report) fourth-quarter 2018 adjusted earnings of $6.08 per share missed the Zacks Consensus Estimate of $6.39. Further, the figure came in 2% lower than the year-ago tally.
Invesco (IVZ - Free Report) reported fourth-quarter 2018 adjusted earnings of 44 cents per share, lagging the Zacks Consensus Estimate of 56 cents. Also, the figure came in 39.7% lower than the prior-year quarter level.
Blackstone (BX - Free Report) posted fourth-quarter 2018 net loss of 2 cents per unit. The Zacks Consensus Estimate for earnings was pegged at 3 cents. Additionally, the reported figure reflected a decline from 45 cents earned in the prior-year quarter.
Zacks' Top 10 Stocks for 2019
In addition to the stocks discussed above, wouldn't you like to know about our 10 finest buy-and-holds for the year?
From more than 4,000 companies covered by the Zacks Rank, these 10 were picked by a process that consistently beats the market. Even during 2018 while the market dropped -5.2%, our Top 10s were up well into double-digits. And during bullish 2012 – 2017, they soared far above the market's +126.3%, reaching +181.9%.
This year, the portfolio features a player that thrives on volatility, an AI comer, and a dynamic tech company that helps doctors deliver better patient outcomes at lower costs.
See Stocks Today >>