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Evercore (EVR) Q2 Earnings Beat Estimates, Stock Down 1.1%
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Evercore (EVR - Free Report) reported second-quarter 2021 adjusted earnings per share of $3.17, which handily surpassed the Zacks Consensus Estimate of $2.82. Also, the bottom line came in higher than the prior-year quarter’s $1.53 per share.
Impressive revenue growth, with support from higher asset management and advisory fees, supported the company. Also, rise in assets under management (AUM) was a tailwind. In addition, Evercore’s liquidity position was consistently strong through the quarter. However, escalating expenses were a major drag.
After considering certain one-time items, on a GAAP basis, net income available to common shareholders was $140.4 million or $3.21 per share compared with the $56.4 million or $1.35 per share reported in the year-ago quarter.
Revenues Climb, Expenses Flare Up
Total revenues increased 35.1% year over year to $692.17 million in the reported quarter. Jump in asset management and administration fees, other revenues, including interest and investments and advisory fees, led to uptick. The reported figure also beat the Zacks Consensus Estimate of $541.4 million. On an adjusted basis, net revenues came in at $691.2 million, up 34.5%.
Total expenses flared up 14.4% to $480.85 million from the prior-year quarter. This upswing was partly offset by lower execution, clearing and custody fees, communications and information services and other operating expenses. Adjusted compensation ratio was 59%, down from the year-earlier quarter’s 65%.
Adjusted operating margin came in at 30.4% compared with the prior-year quarter’s 20%.
Quarterly Segment Performance (Adjusted)
Investment Banking: Net revenues climbed 35.4% year over year to $670.8 million. Also, operating income increased considerably to $202.7 million. Advisory client transactions were 255,000, up 15%. Notably, underwriting revenues of $48.05 million in the quarter plunged 48.7% from the prior-year period.
Investment Management: Net revenues were $17.05 million, up 45.7% from the prior-year quarter. Operating income was $4.4 million, against a loss of $0.6 million in year-ago quarter. Additionally, an AUM of $11.13 million was reported in the second quarter, up 7% from the year-ago quarter.
Balance-Sheet Position
As of Jun 30, 2021, cash and cash equivalents were $442.2 million and marketable and investment securities totaled $1.1 billion. Moreover, current assets exceeded current liabilities by $1.3 billion as of the same date.
Capital Deployment Activities
The company returned $496.3 million to shareholders during the quarter through dividends and repurchases of 3.3 million shares at an average price of $128.40.
Our Viewpoint
Evercore displayed an impressive performance during the second 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.
Bank of America’s (BAC - Free Report) second-quarter 2021 earnings of $1.03 per share handily beat the Zacks Consensus Estimate of 77 cents. The bottom line compared favorably with the 37 cents earned in the prior-year quarter.
PNC Financial (PNC - Free Report) delivered second-quarter 2021 earnings surprise of 42.4% on substantial reserve release. Adjusted earnings per share of $4.50 surpassed the Zacks Consensus Estimate of $3.16.
Large reserve releases, solid investment banking performance and modest rise in loan demand drove JPMorgan’s (JPM - Free Report) second-quarter 2021 earnings of $3.78 per share. The bottom line comfortably outpaced the Zacks Consensus Estimate of $3.05.
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Evercore (EVR) Q2 Earnings Beat Estimates, Stock Down 1.1%
Evercore (EVR - Free Report) reported second-quarter 2021 adjusted earnings per share of $3.17, which handily surpassed the Zacks Consensus Estimate of $2.82. Also, the bottom line came in higher than the prior-year quarter’s $1.53 per share.
Impressive revenue growth, with support from higher asset management and advisory fees, supported the company. Also, rise in assets under management (AUM) was a tailwind. In addition, Evercore’s liquidity position was consistently strong through the quarter. However, escalating expenses were a major drag.
After considering certain one-time items, on a GAAP basis, net income available to common shareholders was $140.4 million or $3.21 per share compared with the $56.4 million or $1.35 per share reported in the year-ago quarter.
Revenues Climb, Expenses Flare Up
Total revenues increased 35.1% year over year to $692.17 million in the reported quarter. Jump in asset management and administration fees, other revenues, including interest and investments and advisory fees, led to uptick. The reported figure also beat the Zacks Consensus Estimate of $541.4 million. On an adjusted basis, net revenues came in at $691.2 million, up 34.5%.
Total expenses flared up 14.4% to $480.85 million from the prior-year quarter. This upswing was partly offset by lower execution, clearing and custody fees, communications and information services and other operating expenses.
Adjusted compensation ratio was 59%, down from the year-earlier quarter’s 65%.
Adjusted operating margin came in at 30.4% compared with the prior-year quarter’s 20%.
Quarterly Segment Performance (Adjusted)
Investment Banking: Net revenues climbed 35.4% year over year to $670.8 million. Also, operating income increased considerably to $202.7 million. Advisory client transactions were 255,000, up 15%. Notably, underwriting revenues of $48.05 million in the quarter plunged 48.7% from the prior-year period.
Investment Management: Net revenues were $17.05 million, up 45.7% from the prior-year quarter. Operating income was $4.4 million, against a loss of $0.6 million in year-ago quarter. Additionally, an AUM of $11.13 million was reported in the second quarter, up 7% from the year-ago quarter.
Balance-Sheet Position
As of Jun 30, 2021, cash and cash equivalents were $442.2 million and marketable and investment securities totaled $1.1 billion. Moreover, current assets exceeded current liabilities by $1.3 billion as of the same date.
Capital Deployment Activities
The company returned $496.3 million to shareholders during the quarter through dividends and repurchases of 3.3 million shares at an average price of $128.40.
Our Viewpoint
Evercore displayed an impressive performance during the second 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-eps-surprise-chart | Evercore Inc Quote
Currently, Evercore 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 Banks
Bank of America’s (BAC - Free Report) second-quarter 2021 earnings of $1.03 per share handily beat the Zacks Consensus Estimate of 77 cents. The bottom line compared favorably with the 37 cents earned in the prior-year quarter.
PNC Financial (PNC - Free Report) delivered second-quarter 2021 earnings surprise of 42.4% on substantial reserve release. Adjusted earnings per share of $4.50 surpassed the Zacks Consensus Estimate of $3.16.
Large reserve releases, solid investment banking performance and modest rise in loan demand drove JPMorgan’s (JPM - Free Report) second-quarter 2021 earnings of $3.78 per share. The bottom line comfortably outpaced the Zacks Consensus Estimate of $3.05.