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Evercore (EVR) Q1 Earnings Top Estimates on Fee Income Growth

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Evercore (EVR - Free Report) reported first-quarter 2021 adjusted earnings per share of $3.29, which handily surpassed the Zacks Consensus Estimate of $2.63. Also, the bottom line was up from the prior-year quarter’s $1.21 per share.

Impressive revenue growth with support from higher underwriting and advisory fees supported the results. Also, rise in assets under management (AUM) was a tailwind. In addition, liquidity position was consistently strong. However, escalating expenses posed a major drag.

After considering certain one-time items, on a GAAP basis, net income available to common shareholders was $144.4 million or $3.25 per share compared with the $31.2 million or 74 cents per share reported in the year-ago quarter.

Revenues Climb, Expenses Increase

Net revenues increased 55.1% year over year to $662.3 million in the reported quarter. Jump in underwriting fees and advisory fees led to rise. The figure surpassed the Zacks Consensus Estimate of $541.4 million. On an adjusted basis, net revenues were $669.9 million, up 54%.

Total expenses flared up 23.9% to $468.1 million from the prior-year quarter. This upswing mainly stemmed from rise in employee compensation and benefits, along with professional expenses, partly offset by lower travel and related costs.

Adjusted compensation ratio was 59%, down from the year-earlier quarter’s 62%.

Adjusted operating margin came in at 30.1% compared with the prior-year quarter’s 19%.

Quarterly Segment Performance (Adjusted)

Investment Banking: Net revenues increased 56% year over year to $652 million. Also, operating income rose considerably to $195.5 million. Advisory client transactions were 248,000, up 12%. Notably, underwriting revenues of $79.3 million in the quarter more than doubled from the prior-year period.

Investment Management: Net revenues were $17.9 million, up 12% from the prior-year quarter. Operating income was $6.3 million, up from $3.3 million in year-ago quarter. Additionally, AUM of $10.6 million was reported in the first quarter, up 11%.

Balance-Sheet Position

As of Mar 31, 2021, cash and cash equivalents were $410.8 million and marketable and investment securities totaled $873.1 million. Moreover, current assets exceeded current liabilities by $1.2 billion as of the same date.

Capital Deployment Activities

The company returned $275.3 million to shareholders during the quarter through dividends and repurchases of 1.9 million shares at an average price of $121.03.

Our Viewpoint

Evercore displayed impressive performance during the first quarter. Its top-line strength reflects earnings stability. Apart from this, the company’s strategic initiatives to bolster its investment banking segment bode well. Though escalating expenses are a concern, it is well poised to undertake any opportunistic expansion given its sound liquidity position.

 

Evercore Inc Price, Consensus and EPS Surprise

Evercore Inc Price, Consensus and EPS Surprise

Evercore Inc price-consensus-eps-surprise-chart | Evercore Inc Quote

 

Currently, Evercore has a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Performance of Other Banks

Artisan Partners Asset Management (APAM - Free Report) first-quarter 2021 adjusted earnings came in at $1.13 per share, surpassing the Zacks Consensus Estimate of $1.10. Also, the bottom line was 71% higher than the year-ago quarter figure.

Invesco’s (IVZ - Free Report) first-quarter 2021 adjusted earnings of 68 cents per share surpassed the Zacks Consensus Estimate of 62 cents. Also, the bottom line grew 100% from the prior-year quarter.

Ameriprise Financial’s (AMP - Free Report) first-quarter 2021 adjusted operating earnings per share of $5.43 handily surpassed the Zacks Consensus Estimate of $4.73. Moreover, the bottom line came in 27% higher than the year-ago quarter.

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