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The Carlyle Group (CG - Free Report) reported fourth-quarter 2020 post-tax distributable earnings of 64 cents per share, which surpassed the Zacks Consensus Estimate of 44 cents. Also, the bottom line was 36.2% higher than the year-ago quarter figure.
Results exclude unrealized performance allocations and related compensation expense, unrealized principal investment income, equity-based compensation expense and charges related to non-recurring items.
Lower expenses and higher AUM were tailwinds. Also, rise in revenues on higher fees supported the results. These factors seem to have led to bullish investor sentiments as the company’s shares rallied more than 7% following the earnings release.
Net income available to common stockholders (GAAP basis) was $518.8 million or $1.44 per share against net loss of $8.3 million or 8 cents per share in the prior-year quarter.
In 2020, the company reported net income of $348.2 million or 97 cents compared with $345.3 million or $2.82 in 2019. The bottom line lagged the Zacks Consensus Estimate of $1.86.
Revenues Increase, Expenses Decline
In 2020, Carlyle reported segment revenues of $2.3 billion compared with $2.1 billion in the prior year. The Zacks Consensus Estimate was pegged at $2.2 billion.
Segment revenues in the fourth quarter came in at $629.7 million, up 8.4% from the year-ago quarter. The rise primarily resulted from higher fees and performance revenues. Also, the top line beat the Zacks Consensus Estimate of $561.6 million.
Total expenses amounted to $392.8 million, down 4% year over year. The decrease was largely due to fall in general, administrative and other expenses, partly offset by a rise in employee compensation and benefits.
As of Dec 31, 2020, AUM was $245.8 billion, up 10% from the year-earlier quarter. Fee-earning AUM totaled $170.1 million or 69% of total AUM during the fourth quarter.
Balance Sheet Position
As of Dec 31, 2020, assets attributable to Carlyle shareholders (including net cash and equivalents, net accrued performance revenue and investments) totaled $3.4 billion, compared with $2.4 billion in prior-year quarter.
Cash and cash equivalents were $987.6 billion in the fourth quarter, with no balance drawn on the $775 million revolving line of credit.
Our Viewpoint
Carlyle delivered an impressive performance in the fourth quarter. Rise in AUM given the inflows will support top-line expansion. Moreover, prudent cost management will boost profitability to some extent.
The Carlyle Group L.P. Price, Consensus and EPS Surprise
Evercore (EVR - Free Report) shares gained 4% in the afterhours trading session in response to better-than-expected fourth-quarter 2020 results. Adjusted earnings per share of $5.67 handily surpassed the Zacks Consensus Estimate of $2.29. Also, the bottom line was up from the prior-year quarter’s $2.72 per share.
Waddell & Reed Financial Inc.’s fourth-quarter 2020 adjusted earnings of 41 cents per share lagged the Zacks Consensus Estimate of 46 cents. However, the bottom line was above 23 cents reported in the prior-year quarter.
Franklin Resources Inc. (BEN - Free Report) reported first-quarter fiscal 2021 (ended Dec 31) adjusted earnings of 73 cents per share, inching past the Zacks Consensus Estimate of 72 cents. Results also compare favorably with the earnings of 67 cents per share recorded in the prior-year quarter.
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Carlyle (CG) Q4 Earnings Beat Estimates, Stock Gains 7.1%
The Carlyle Group (CG - Free Report) reported fourth-quarter 2020 post-tax distributable earnings of 64 cents per share, which surpassed the Zacks Consensus Estimate of 44 cents. Also, the bottom line was 36.2% higher than the year-ago quarter figure.
Results exclude unrealized performance allocations and related compensation expense, unrealized principal investment income, equity-based compensation expense and charges related to non-recurring items.
Lower expenses and higher AUM were tailwinds. Also, rise in revenues on higher fees supported the results. These factors seem to have led to bullish investor sentiments as the company’s shares rallied more than 7% following the earnings release.
Net income available to common stockholders (GAAP basis) was $518.8 million or $1.44 per share against net loss of $8.3 million or 8 cents per share in the prior-year quarter.
In 2020, the company reported net income of $348.2 million or 97 cents compared with $345.3 million or $2.82 in 2019. The bottom line lagged the Zacks Consensus Estimate of $1.86.
Revenues Increase, Expenses Decline
In 2020, Carlyle reported segment revenues of $2.3 billion compared with $2.1 billion in the prior year. The Zacks Consensus Estimate was pegged at $2.2 billion.
Segment revenues in the fourth quarter came in at $629.7 million, up 8.4% from the year-ago quarter. The rise primarily resulted from higher fees and performance revenues. Also, the top line beat the Zacks Consensus Estimate of $561.6 million.
Total expenses amounted to $392.8 million, down 4% year over year. The decrease was largely due to fall in general, administrative and other expenses, partly offset by a rise in employee compensation and benefits.
As of Dec 31, 2020, AUM was $245.8 billion, up 10% from the year-earlier quarter. Fee-earning AUM totaled $170.1 million or 69% of total AUM during the fourth quarter.
Balance Sheet Position
As of Dec 31, 2020, assets attributable to Carlyle shareholders (including net cash and equivalents, net accrued performance revenue and investments) totaled $3.4 billion, compared with $2.4 billion in prior-year quarter.
Cash and cash equivalents were $987.6 billion in the fourth quarter, with no balance drawn on the $775 million revolving line of credit.
Our Viewpoint
Carlyle delivered an impressive performance in the fourth quarter. Rise in AUM given the inflows will support top-line expansion. Moreover, prudent cost management will boost profitability to some extent.
The Carlyle Group L.P. Price, Consensus and EPS Surprise
The Carlyle Group L.P. price-consensus-eps-surprise-chart | The Carlyle Group L.P. Quote
Currently, Carlyle 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 Companies
Evercore (EVR - Free Report) shares gained 4% in the afterhours trading session in response to better-than-expected fourth-quarter 2020 results. Adjusted earnings per share of $5.67 handily surpassed the Zacks Consensus Estimate of $2.29. Also, the bottom line was up from the prior-year quarter’s $2.72 per share.
Waddell & Reed Financial Inc.’s fourth-quarter 2020 adjusted earnings of 41 cents per share lagged the Zacks Consensus Estimate of 46 cents. However, the bottom line was above 23 cents reported in the prior-year quarter.
Franklin Resources Inc. (BEN - Free Report) reported first-quarter fiscal 2021 (ended Dec 31) adjusted earnings of 73 cents per share, inching past the Zacks Consensus Estimate of 72 cents. Results also compare favorably with the earnings of 67 cents per share recorded in the prior-year quarter.
Breakout Biotech Stocks with Triple-Digit Profit Potential
The biotech sector is projected to surge beyond $775 billion by 2024 as scientists develop treatments for thousands of diseases. They’re also finding ways to edit the human genome to literally erase our vulnerability to these diseases.
Zacks has just released Century of Biology: 7 Biotech Stocks to Buy Right Now to help investors profit from 7 stocks poised for outperformance. Our recent biotech recommendations have produced gains of +50%, +83% and +164% in as little as 2 months. The stocks in this report could perform even better.
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