SEI Investments Co.’s (SEIC - Free Report) third-quarter 2019 earnings of 86 cents per share surpassed the Zacks Consensus Estimate of 83 cents. The figure reflects a rise of 7.5% from the prior-year quarter.
Results were primarily driven by growth in revenues and lower expenses. However, a decline in assets under management (AUM) was a headwind.
Net income was $132.2 million, up from $128.3 million recorded in the year-ago quarter.
Revenues Improve, Expenses & AUM Decline
Total revenues were $416.3 million, up 1.9% year over year. The rise reflected higher asset management, administration and distribution fees. Moreover, the reported figure marginally surpassed the Zacks Consensus Estimate of $416 million.
Total expenses were $295.6 million, down marginally year over year. The contraction was led by a fall in almost all components of expenses, except for compensation, benefits and other personnel expenses, data processing and computer-related expenses, depreciation costs, and amortization expenses.
Operating income increased 7.3% year over year to $120.6 million.
As of Sep 30, 2019, AUM was $334.7 billion, reflecting a decline of nearly 1.3% from the prior-year quarter. Client assets under administration (AUA) were $662 billion, up 15% year over year. Note that client AUA does not include $12.4 billion related to Funds of Funds assets that were reported on Sep 30, 2019.
Share Repurchase
In the reported quarter, SEI Investments bought back 1.4 million shares for $81.4 million.
Our Take
SEI Investments is well positioned for organic growth, given its innovative and diverse global investment products and services. However, despite a fall in expenses in the third quarter, overall costs are likely to remain elevated in the near term due to higher compensation costs. This will likely hurt bottom-line growth to some extent.
Currently, SEI Investments carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Performance of Other Asset Managers
BlackRock, Inc.’s (BLK - Free Report) third-quarter 2019 adjusted earnings of $7.15 per share surpassed the Zacks Consensus Estimate of $6.95. However, the figure was 4.9% lower than the year-ago quarter’s number.
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.
Cohen & Steers’ (CNS - Free Report) third-quarter 2019 adjusted earnings of 65 cents per share beat the Zacks Consensus Estimate of 63 cents. Also, the bottom line was 1.6% higher than the year-ago quarter figure.
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SEI Investments Co.’s (SEIC - Free Report) third-quarter 2019 earnings of 86 cents per share surpassed the Zacks Consensus Estimate of 83 cents. The figure reflects a rise of 7.5% from the prior-year quarter.
Results were primarily driven by growth in revenues and lower expenses. However, a decline in assets under management (AUM) was a headwind.
Net income was $132.2 million, up from $128.3 million recorded in the year-ago quarter.
Revenues Improve, Expenses & AUM Decline
Total revenues were $416.3 million, up 1.9% year over year. The rise reflected higher asset management, administration and distribution fees. Moreover, the reported figure marginally surpassed the Zacks Consensus Estimate of $416 million.
Total expenses were $295.6 million, down marginally year over year. The contraction was led by a fall in almost all components of expenses, except for compensation, benefits and other personnel expenses, data processing and computer-related expenses, depreciation costs, and amortization expenses.
Operating income increased 7.3% year over year to $120.6 million.
As of Sep 30, 2019, AUM was $334.7 billion, reflecting a decline of nearly 1.3% from the prior-year quarter. Client assets under administration (AUA) were $662 billion, up 15% year over year. Note that client AUA does not include $12.4 billion related to Funds of Funds assets that were reported on Sep 30, 2019.
Share Repurchase
In the reported quarter, SEI Investments bought back 1.4 million shares for $81.4 million.
Our Take
SEI Investments is well positioned for organic growth, given its innovative and diverse global investment products and services. However, despite a fall in expenses in the third quarter, overall costs are likely to remain elevated in the near term due to higher compensation costs. This will likely hurt bottom-line growth to some extent.
Currently, SEI Investments carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Performance of Other Asset Managers
BlackRock, Inc.’s (BLK - Free Report) third-quarter 2019 adjusted earnings of $7.15 per share surpassed the Zacks Consensus Estimate of $6.95. However, the figure was 4.9% lower than the year-ago quarter’s number.
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.
Cohen & Steers’ (CNS - Free Report) third-quarter 2019 adjusted earnings of 65 cents per share beat the Zacks Consensus Estimate of 63 cents. Also, the bottom line was 1.6% higher than the year-ago quarter figure.
Today's Best Stocks from Zacks
Would you like to see the updated picks from our best market-beating strategies? From 2017 through 2018, while the S&P 500 gained +15.8%, five of our screens returned +38.0%, +61.3%, +61.6%, +68.1%, and +98.3%.
This outperformance has not just been a recent phenomenon. From 2000 – 2018, while the S&P averaged +4.8% per year, our top strategies averaged up to +56.2% per year.
See their latest picks free >>
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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