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Carlyle (CG) Stock up 6.6% on Q2 Earnings Beat, Expenses Rise

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The Carlyle Group Inc. (CG - Free Report) shares appreciated 6.6% after the company reported second-quarter 2021 post-tax distributable earnings of 88 cents per share, which surpassed the Zacks Consensus Estimate of 61 cents. Also, the bottom line increased 66% from the year-ago quarter figure.

While a rise in revenues on higher fees supported the results, increased expenses were headwinds.

Net income available to common stockholders (GAAP basis) was $925 million or $2.55 per share compared to $145.9 million or 41 cents in the prior-year quarter.

Revenues & Expenses Increase

Segment revenues were $919 million, up 57.8% from the year-ago quarter. The rise primarily resulted from higher fees and investment income. Also, the top line outpaced the Zacks Consensus Estimate of $674.8 million.

Fee revenues in the second quarter increased 5.1% year over year to $425.4 million. A rise in fund management fees was partially offset by lower transaction and portfolio advisory fees. Realized performance revenues significantly increased to $454 million from $152.2 million in the prior-year quarter.

Total segment expenses amounted to $523.6 million, flaring up from $383.8 million in the prior-year quarter. The increase was largely due to a rise in employee compensation and benefits expenses.

AUM Climbs

As of Jun 30, 2021, total AUM was a record $276 billion, up 6% from the earlier quarter. This was primarily attributed to a robust increase across the company’s carry fund portfolio and strong fundraising activity.

Fee-earning AUM for the reported quarter totaled $175 billion, sequentially up nearly 1%.

Dividend Update

On Jul 29, Carlyle’s board of directors announced a quarterly cash dividend of 25 cents per share. The dividend will be paid out on Aug 17 to shareholders of record as of Aug 10, 2021.

Conclusion

Carlyle put up a decent show in the second quarter in terms of earnings and revenues. Its efforts to expand operations by entering business avenues are encouraging. Also, increasing assets under management (AUM) balance is likely to continue aiding top-line growth.

However, a persistent rise in expenses is expected to deter bottom-line growth. Unsustainable capital deployment activities are concerning.

Carlyle Group Inc. Price, Consensus and EPS Surprise

 

Carlyle Group Inc. Price, Consensus and EPS Surprise

Carlyle Group Inc. price-consensus-eps-surprise-chart | Carlyle Group Inc. 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 Finance Stocks

UMB Financial’s (UMBF - Free Report) operating earnings per share of $1.80 per share outpaced the Zacks Consensus Estimate of $1.74. The bottom line also compared favorably with the prior-year quarter’s $1.33.

Annaly Capital Management, Inc. (NLY - Free Report) reported second-quarter 2021 earnings available for distribution (EAD), formerly known as core earnings per share, excluding premium amortization adjustment (“PAA”), of 30 cents that surpassed the Zacks Consensus Estimate of 27 cents. The figure compared favorably with the year-ago quarter’s 27 cents.

Huntington Bancshares Incorporated (HBAN - Free Report) reported second-quarter 2021 adjusted earnings per share of 35 cents, outpacing the Zacks Consensus Estimate of 32 cents. An increase in revenues, aided by high net interest and non-interest income, supported the results.