Moelis & Company’s (MC - Free Report) second-quarter 2019 adjusted earnings of 56 cents per share surpassed the Zacks Consensus Estimate of 34 cents. However, the figure compared unfavorably with the prior-year quarter’s earnings of 78 cents.
Results benefited from lower expenses. Moreover, the company’s liquidity position remained strong. However, a decline in revenues hurt results to some extent.
Net income for the reported quarter (GAAP basis) was $37.7 million or 54 cents per share, down from $53.1 million or 72 cents recorded in the prior-year quarter.
Revenues & Costs Decline
Total revenues declined 30.3% year over year to $153.5 million. This decrease was mainly due to a fall in the number of transactions completed in the reported quarter. However, the top line surpassed the Zacks Consensus Estimate of $146.8 million.
Total operating expenses (adjusted basis) were $115.7 million, down 29.2% year over year. Fall in both compensation and benefits costs, and non-compensation expenses led to this decline.
Other income was $4.3 million, up from $1.3 million recorded in the year-ago quarter.
As of Jun 30, 2019, the company had cash and liquid investments of $108.4 million.
Share Repurchases
During the quarter, it repurchased 355,039 shares for $12.6 million.
Our Take
While the company’s global expansion initiatives along with strategic partnerships in Japan and Mexico will likely support its top line; its hiring trend, as it expands operations, is likely to lead to a persistent increase in overall costs. Thus, higher expenses will likely hamper bottom-line growth to an extent.
Currently, Moelis & Company carries a Zacks Rank #4 (Sell).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Performance of Other Investment Management Stocks
Invesco (IVZ - Free Report) reported second-quarter 2019 adjusted earnings of 65 cents per share, beating the Zacks Consensus Estimate of 57 cents. However, the bottom line was 1.5% below the prior-year quarter figure. Results benefited from an improvement in assets under management (AUM) and rise in revenues, driven by the OppenheimerFunds buyout.
BlackRock, Inc.’s (BLK - Free Report) second-quarter adjusted earnings of $6.41 per share lagged the Zacks Consensus Estimate of $6.52. Moreover, the figure was 3.8% lower than the year-ago quarter’s number. Results were hurt by a decline in revenues along with higher expenses. Nevertheless, growth in AUM supported results to some extent.
Blackstone (BX - Free Report) reported second-quarter distributable earnings of 57 cents, beating the Zacks Consensus Estimate of 50 cents. Moreover, the figure reflected improvement from 56 cents earned in the prior-year quarter. Results benefited from growth in AUM and lower expenses. However, a decline in revenues acted as a headwind.
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It’s a little-known chemical company that’s up 65% over last year, yet still dirt cheap. With unrelenting demand, soaring 2022 earnings estimates, and $1.5 billion for repurchasing shares, retail investors could jump in at any time.
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Moelis & Company’s (MC - Free Report) second-quarter 2019 adjusted earnings of 56 cents per share surpassed the Zacks Consensus Estimate of 34 cents. However, the figure compared unfavorably with the prior-year quarter’s earnings of 78 cents.
Results benefited from lower expenses. Moreover, the company’s liquidity position remained strong. However, a decline in revenues hurt results to some extent.
Net income for the reported quarter (GAAP basis) was $37.7 million or 54 cents per share, down from $53.1 million or 72 cents recorded in the prior-year quarter.
Revenues & Costs Decline
Total revenues declined 30.3% year over year to $153.5 million. This decrease was mainly due to a fall in the number of transactions completed in the reported quarter. However, the top line surpassed the Zacks Consensus Estimate of $146.8 million.
Total operating expenses (adjusted basis) were $115.7 million, down 29.2% year over year. Fall in both compensation and benefits costs, and non-compensation expenses led to this decline.
Other income was $4.3 million, up from $1.3 million recorded in the year-ago quarter.
As of Jun 30, 2019, the company had cash and liquid investments of $108.4 million.
Share Repurchases
During the quarter, it repurchased 355,039 shares for $12.6 million.
Our Take
While the company’s global expansion initiatives along with strategic partnerships in Japan and Mexico will likely support its top line; its hiring trend, as it expands operations, is likely to lead to a persistent increase in overall costs. Thus, higher expenses will likely hamper bottom-line growth to an extent.
Currently, Moelis & Company carries a Zacks Rank #4 (Sell).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Performance of Other Investment Management Stocks
Invesco (IVZ - Free Report) reported second-quarter 2019 adjusted earnings of 65 cents per share, beating the Zacks Consensus Estimate of 57 cents. However, the bottom line was 1.5% below the prior-year quarter figure. Results benefited from an improvement in assets under management (AUM) and rise in revenues, driven by the OppenheimerFunds buyout.
BlackRock, Inc.’s (BLK - Free Report) second-quarter adjusted earnings of $6.41 per share lagged the Zacks Consensus Estimate of $6.52. Moreover, the figure was 3.8% lower than the year-ago quarter’s number. Results were hurt by a decline in revenues along with higher expenses. Nevertheless, growth in AUM supported results to some extent.
Blackstone (BX - Free Report) reported second-quarter distributable earnings of 57 cents, beating the Zacks Consensus Estimate of 50 cents. Moreover, the figure reflected improvement from 56 cents earned in the prior-year quarter. Results benefited from growth in AUM and lower expenses. However, a decline in revenues acted as a headwind.
More Stock News: This Is Bigger than the iPhone!
It could become the mother of all technological revolutions. Apple sold a mere 1 billion iPhones in 10 years but a new breakthrough is expected to generate more than 27 billion devices in just 3 years, creating a $1.7 trillion market.
Zacks has just released a Special Report that spotlights this fast-emerging phenomenon and 6 tickers for taking advantage of it. If you don't buy now, you may kick yourself in 2020.
Click here for the 6 trades >>
Zacks Names "Single Best Pick to Double"
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
It’s a little-known chemical company that’s up 65% over last year, yet still dirt cheap. With unrelenting demand, soaring 2022 earnings estimates, and $1.5 billion for repurchasing shares, retail investors could jump in at any time.
This company could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in little more than 9 months and NVIDIA which boomed +175.9% in one year.
Free: See Our Top Stock and 4 Runners Up >>
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