The Carlyle Group Inc. ( CG Quick Quote 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.
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%.
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.
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.
Currently, Carlyle carries a Zacks Rank #3 (Hold). You can see
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