We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Federated (FII) Q3 Earnings Beat Estimates on Higher Assets
Read MoreHide Full Article
Federated Investors, Inc. delivered third-quarter 2019.positive earnings surprise of 9.1%. Earnings per share of 72 cents surpassed the Zacks Consensus Estimate of 66 cents. Moreover, the figure compared favorably with the prior-year quarter earnings of 59 cents.
Higher revenues and improved assets under management (AUM) were positives. Also, the company’s liquidity position remained strong. However, elevated expenses were on the downside.
Net income was $73 million compared with $59.6 million witnessed in the year-ago quarter.
Revenues Rise, Costs Escalate
Third-quarter total revenues climbed 10% year over year to $340.3 million. Also, the top line surpassed the Zacks Consensus Estimate of $331 million. Rise in top line was attributable to higher average money market assets.
Also, net investment advisory fees jumped 7% year over year to $232.1 million. In addition, administrative service fees were up 29% to $64.2 million. Further, net service fees (other) jumped 5%, amounting to $44 million.
During the third quarter, Federated derived 41% of its revenues from money-market assets, 58% from long-term assets including equity and fixed-income assets, and remaining 1% from sources other than managed assets.
Supported by lower debt expenses, the company recorded non-operating income of $7.5 million in the quarter compared with $1.8 million a year ago.
Total operating expenses escalated 11% year over year to $251 million. The rise was primarily due to higher office and occupancy, distribution, systems and communications, and compensation and related expenses.
Steady Asset Position
As of Sep 30, 2019, total AUM was a record $527.2 billion, up 21% year over year. Average managed assets were $518 billion, up 19%.
Federated’s equity assets were $80.8 billion, down 4% year over year. However, money market mutual fund assets came in at $261.2 billion, up 43%.
Further, fixed-income assets grew 1% year over year to $65.8 billion. Additionally, money-market assets increased 36% to $359.3 billion.
As of Sep 30, 2019, cash and other investments were $309 million and total long-term debt totaled $120 million compared with $190.5 million and $135 million, respectively, as of Dec 31, 2018.
Our Viewpoint
Federated displays substantial growth potential supported by its diverse asset and product mix as well as a solid liquidity position. In addition, strategic acquisitions are anticipated to be favorable for the company. Though elevated expenses remain a concern, higher revenues could aid the company’s bottom-line performance.
Federated Investors, Inc. Price, Consensus and EPS Surprise
Blackstone’s (BX - Free Report) third-quarter 2019 distributable earnings of 58 cents surpassed the Zacks Consensus Estimate of 54 cents. However, the figure declined from 63 cents earned in the prior-year quarter.
T. Rowe Price Group, Inc. (TROW - Free Report) delivered a positive earnings surprise of 7.6% in third-quarter 2019. Adjusted earnings per share came in at $2.13, outpacing the Zacks Consensus Estimate of $1.98. Results also improved 7% from the year-ago figure of $1.99.
Invesco (IVZ - Free Report) reported third-quarter 2019 adjusted earnings of 70 cents per share, beating the Zacks Consensus Estimate of 57 cents. Also, the bottom line was 6.1% up from the prior-year quarter figure.
5 Stocks Set to Double
Each was hand-picked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2020. Each comes from a different sector and has unique qualities and catalysts that could fuel exceptional growth.
Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.
Image: Bigstock
Federated (FII) Q3 Earnings Beat Estimates on Higher Assets
Federated Investors, Inc. delivered third-quarter 2019.positive earnings surprise of 9.1%. Earnings per share of 72 cents surpassed the Zacks Consensus Estimate of 66 cents. Moreover, the figure compared favorably with the prior-year quarter earnings of 59 cents.
Higher revenues and improved assets under management (AUM) were positives. Also, the company’s liquidity position remained strong. However, elevated expenses were on the downside.
Net income was $73 million compared with $59.6 million witnessed in the year-ago quarter.
Revenues Rise, Costs Escalate
Third-quarter total revenues climbed 10% year over year to $340.3 million. Also, the top line surpassed the Zacks Consensus Estimate of $331 million. Rise in top line was attributable to higher average money market assets.
Also, net investment advisory fees jumped 7% year over year to $232.1 million. In addition, administrative service fees were up 29% to $64.2 million. Further, net service fees (other) jumped 5%, amounting to $44 million.
During the third quarter, Federated derived 41% of its revenues from money-market assets, 58% from long-term assets including equity and fixed-income assets, and remaining 1% from sources other than managed assets.
Supported by lower debt expenses, the company recorded non-operating income of $7.5 million in the quarter compared with $1.8 million a year ago.
Total operating expenses escalated 11% year over year to $251 million. The rise was primarily due to higher office and occupancy, distribution, systems and communications, and compensation and related expenses.
Steady Asset Position
As of Sep 30, 2019, total AUM was a record $527.2 billion, up 21% year over year. Average managed assets were $518 billion, up 19%.
Federated’s equity assets were $80.8 billion, down 4% year over year. However, money market mutual fund assets came in at $261.2 billion, up 43%.
Further, fixed-income assets grew 1% year over year to $65.8 billion. Additionally, money-market assets increased 36% to $359.3 billion.
As of Sep 30, 2019, cash and other investments were $309 million and total long-term debt totaled $120 million compared with $190.5 million and $135 million, respectively, as of Dec 31, 2018.
Our Viewpoint
Federated displays substantial growth potential supported by its diverse asset and product mix as well as a solid liquidity position. In addition, strategic acquisitions are anticipated to be favorable for the company. Though elevated expenses remain a concern, higher revenues could aid the company’s bottom-line performance.
Federated Investors, Inc. Price, Consensus and EPS Surprise
Federated Investors, Inc. price-consensus-eps-surprise-chart | Federated Investors, Inc. Quote
Currently, Federated carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Competitive Landscape
Blackstone’s (BX - Free Report) third-quarter 2019 distributable earnings of 58 cents surpassed the Zacks Consensus Estimate of 54 cents. However, the figure declined from 63 cents earned in the prior-year quarter.
T. Rowe Price Group, Inc. (TROW - Free Report) delivered a positive earnings surprise of 7.6% in third-quarter 2019. Adjusted earnings per share came in at $2.13, outpacing the Zacks Consensus Estimate of $1.98. Results also improved 7% from the year-ago figure of $1.99.
Invesco (IVZ - Free Report) reported third-quarter 2019 adjusted earnings of 70 cents per share, beating the Zacks Consensus Estimate of 57 cents. Also, the bottom line was 6.1% up from the prior-year quarter figure.
5 Stocks Set to Double
Each was hand-picked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2020. Each comes from a different sector and has unique qualities and catalysts that could fuel exceptional growth.
Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.
Today, See These 5 Potential Home Runs >>