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AllianceBernstein (AB) Stock Up 1.5% on Q4 Earnings Beat
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Shares of AllianceBernstein (AB - Free Report) have rallied 1.5% following the release of its fourth-quarter and 2020 results last week. Quarterly adjusted earnings of 97 cents per share surpassed the Zacks Consensus Estimate of 83 cents. Moreover, the bottom line compares favorably with the prior-year quarter’s reported figure of 85 cents.
Results benefited from revenue growth and improved assets under management (AUM) balance. However, higher operating expenses were a headwind.
Net income available to common shareholders (GAAP basis) was $93.2 million, down from the $80 million witnessed in the year-ago quarter.
For 2020, adjusted earnings per unit were $2.91, up from the prior year’s $2.52. Net income available to common shareholders (GAAP basis) was $279 million, increasing 17% year over year.
Adjusted Revenues Rise, Expenses Flare Up
Net revenues for the reported quarter were $879.8 million, up 8% from the year-ago period. It also outpaced the Zacks Consensus Estimate of $784 million. This upswing was primarily driven by higher performance-based fees, Bernstein Research revenues and investment advisory base fees. These were partly offset by investment losses, and lower net dividend and interest income.
For 2020, net revenues of $3 billion rose 5% year over year.
Operating expenses of $579 million flared up 5% from the fourth quarter of 2019. Higher total employee compensation and benefits were partly negated by a decline in promotion and servicing expenses, and amortization of intangible assets.
Operating income came in at $301.2 million, up 14% year on year.
Operating margin was 34.2%, up from the year-earlier quarter’s 32.3%.
Total AUM Improves
As of Dec 31, 2020, total AUM was $685.9 billion, up nearly 10% year over year. The company witnessed net inflows of $3.2 billion in the quarter compared with the prior-year quarter’s $6.5 billion.
For 2020, the company reported $2.6 billion of net outflows compared with the net inflows of $25.2 billion in 2019.
Unit Repurchase Update
During the fourth quarter, AllianceBernstein repurchased 3.6 million units for $116.8 million. These included open market purchases.
Our Take
Growth in the company’s AUM balance, rising active organic growth as well as higher fees will support its financials in the days to come. However, market volatility affecting its investment and income gains is a concern.
AllianceBernstein Holding L.P. Price, Consensus and EPS Surprise
BlackRock, Inc.’s (BLK - Free Report) fourth-quarter 2020 adjusted earnings of $10.18 per share surpassed the Zacks Consensus Estimate of $9.17. Moreover, the figure came in 22% higher than the year-ago quarter’s number.
The Blackstone Group (BX - Free Report) reported fourth-quarter 2020 distributable earnings of $1.13, beating the Zacks Consensus Estimate of 93 cents. Also, the figure witnessed an improvement from the 41 cents earned in the prior-year quarter.
Affiliated Managers Group, Inc.’s (AMG - Free Report) adjusted earnings aggregated $4.22 per share for the October-December quarter, outpacing the Zacks Consensus Estimate by 49 cents. Yet, it came in 6.6% lower than the year-ago quarter figure.
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Ignited by referendums and legislation, this industry is expected to blast from an already robust $17.7 billion in 2019 to a staggering $73.6 billion by 2027. Early investors stand to make a killing, but you have to be ready to act and know just where to look.
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AllianceBernstein (AB) Stock Up 1.5% on Q4 Earnings Beat
Shares of AllianceBernstein (AB - Free Report) have rallied 1.5% following the release of its fourth-quarter and 2020 results last week. Quarterly adjusted earnings of 97 cents per share surpassed the Zacks Consensus Estimate of 83 cents. Moreover, the bottom line compares favorably with the prior-year quarter’s reported figure of 85 cents.
Results benefited from revenue growth and improved assets under management (AUM) balance. However, higher operating expenses were a headwind.
Net income available to common shareholders (GAAP basis) was $93.2 million, down from the $80 million witnessed in the year-ago quarter.
For 2020, adjusted earnings per unit were $2.91, up from the prior year’s $2.52. Net income available to common shareholders (GAAP basis) was $279 million, increasing 17% year over year.
Adjusted Revenues Rise, Expenses Flare Up
Net revenues for the reported quarter were $879.8 million, up 8% from the year-ago period. It also outpaced the Zacks Consensus Estimate of $784 million. This upswing was primarily driven by higher performance-based fees, Bernstein Research revenues and investment advisory base fees. These were partly offset by investment losses, and lower net dividend and interest income.
For 2020, net revenues of $3 billion rose 5% year over year.
Operating expenses of $579 million flared up 5% from the fourth quarter of 2019. Higher total employee compensation and benefits were partly negated by a decline in promotion and servicing expenses, and amortization of intangible assets.
Operating income came in at $301.2 million, up 14% year on year.
Operating margin was 34.2%, up from the year-earlier quarter’s 32.3%.
Total AUM Improves
As of Dec 31, 2020, total AUM was $685.9 billion, up nearly 10% year over year. The company witnessed net inflows of $3.2 billion in the quarter compared with the prior-year quarter’s $6.5 billion.
For 2020, the company reported $2.6 billion of net outflows compared with the net inflows of $25.2 billion in 2019.
Unit Repurchase Update
During the fourth quarter, AllianceBernstein repurchased 3.6 million units for $116.8 million. These included open market purchases.
Our Take
Growth in the company’s AUM balance, rising active organic growth as well as higher fees will support its financials in the days to come. However, market volatility affecting its investment and income gains is a concern.
AllianceBernstein Holding L.P. Price, Consensus and EPS Surprise
AllianceBernstein Holding L.P. price-consensus-eps-surprise-chart | AllianceBernstein Holding L.P. Quote
Currently, AllianceBernstein carries a Zacks Rank #2 (Buy). 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) fourth-quarter 2020 adjusted earnings of $10.18 per share surpassed the Zacks Consensus Estimate of $9.17. Moreover, the figure came in 22% higher than the year-ago quarter’s number.
The Blackstone Group (BX - Free Report) reported fourth-quarter 2020 distributable earnings of $1.13, beating the Zacks Consensus Estimate of 93 cents. Also, the figure witnessed an improvement from the 41 cents earned in the prior-year quarter.
Affiliated Managers Group, Inc.’s (AMG - Free Report) adjusted earnings aggregated $4.22 per share for the October-December quarter, outpacing the Zacks Consensus Estimate by 49 cents. Yet, it came in 6.6% lower than the year-ago quarter figure.
Looking for Stocks with Skyrocketing Upside?
Zacks has just released a Special Report on the booming investment opportunities of legal marijuana.
Ignited by referendums and legislation, this industry is expected to blast from an already robust $17.7 billion in 2019 to a staggering $73.6 billion by 2027. Early investors stand to make a killing, but you have to be ready to act and know just where to look.
See the pot stocks we're targeting >>