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Why Is Invesco (IVZ) Down 6.9% 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 lost about 6.9% in that time frame, underperforming the S&P 500.

Will the recent negative trend continue leading up to its next earnings release, or is Invesco due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.

Invesco Q1 Earnings Beat Estimates, Revenues Down

Invesco reported first-quarter 2019 adjusted earnings of 56 cents per share, beating the Zacks Consensus Estimate of 52 cents. However, the figure was 16.4% below the prior-year quarter level.

Results benefited from improvement in assets under management (AUM) balance and rise in performance fees. However, lower net revenues and increase in operating expenses were the undermining factors.

On a GAAP basis, net income attributable to common shareholders for the reported quarter came in at $177.7 million or 44 cents per share, down from $253.9 million or 62 cents per share a year ago.

Revenues Fall, Expenses Rise

GAAP operating revenues were $1.21 billion, down 10.4% year over year. Also, the figure missed the Zacks Consensus Estimate of $1.24 billion. Adjusted net revenues decreased 7.4% year over year to $887.1 million.

Adjusted operating expenses were $602.8 million, up marginally from the prior-year quarter. The rise was mainly due to an increase in property, office and technology expenses.

Adjusted operating margin for the quarter was 32.0% compared with 37.3% a year ago.

AUM Improves

As of Mar 31, 2019, AUM was $954.8 billion, up2.2% year over year. Average AUM for the first quarter totaled $932.8 billion, down 1.9% from the year-ago quarter. Further, the March quarter witnessed long-term net outflows of $5.4 billion.

Share Repurchase Update

During the first quarter, Invesco repurchased 2.6 million shares for $50 million.

How Have Estimates Been Moving Since Then?

It turns out, fresh estimates have trended downward during the past month.

VGM Scores

At this time, Invesco has a poor Growth Score of F, however its Momentum Score is doing a lot better with a B. Following the exact same course, the stock was allocated a grade of B on the value side, putting it in the top 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. Notably, Invesco has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.


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