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Affiliated Managers (AMG) Q3 Earnings Beat on Higher Revenues
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Affiliated Managers Group Inc.’s (AMG - Free Report) third-quarter 2021 economic earnings of $4.00 per share surpassed the Zacks Consensus Estimate of $3.93. The bottom line grew 22.3% year over year.
Results were aided by an improvement in revenues and growth in assets under management (AUM) balance, partly offset by higher expenses. Further, the company had a robust liquidity position.
Economic net income was $168.5 million, up 10.8% from the prior-year quarter.
Revenues & AUM Improve, Expenses Rise
Total revenues improved 16.2% year over year to $575.2 million. However, the top line lagged the Zacks Consensus Estimate of $599.7 million.
Adjusted EBITDA was $227.7 million, jumping 25.7% from the year-ago quarter.
Total expenses increased 10.1% year over year to $395.3 million. An increase in all cost components, except for intangible amortization and impairment costs, and depreciation and other amortization costs, led to the rise.
As of Sep 30, 2021, total AUM was $747.8 billion, up 14.4% year over year. Net client cash inflows in the quarter were $3.3 billion.
Capital & Liquidity Position Decent
As of Sep 30, 2021, Affiliated Managers had $1.13 billion in cash and cash equivalents compared with $1.04 billion as of Dec 31, 2020. The company had $2.49 billion of debt, which increased 7.8% from the Dec 31, 2020 level.
Shareholders’ equity as of Sep 30, 2021, was $2.64 billion compared with $2.78 billion as of Dec 31, 2020.
Share Repurchase Update
In the reported quarter, the company repurchased shares worth $100 million.
Our Take
In October 2021, Affiliated Managers completed the deal to acquire a majority equity stake in Parnassus Investments, which is expected to increase its ESG-focused AUM balance. Recently, the company announced a partnership deal with Abacus Capital Group, which will likely enhance its participation in private markets.
Affiliated Managers remains well-positioned for growth on the back of successful partnerships and global distribution capability along with a diverse product mix. However, the presence of substantial intangible assets on the company's balance sheet remains a concern.
Affiliated Managers Group, Inc. Price, Consensus and EPS Surprise
BlackRock, Inc.’s (BLK - Free Report) third-quarter 2021 adjusted earnings of $10.95 per share outpaced the Zacks Consensus Estimate of $9.63. The figure reflects a rise of 18.8% from the year-ago quarter’s number.
Blackstone’s (BX - Free Report) third-quarter 2021 distributable earnings of $1.28 per share comfortably surpassed the Zacks Consensus Estimate of 93 cents. The figure reflects a significant rise from 63 cents recorded in the prior-year quarter.
SEI Investments Co.’s (SEIC - Free Report) third-quarter 2021 earnings of 97 cents per share met the Zacks Consensus Estimate. The bottom line reflected 29% growth from the prior-year quarter.
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Affiliated Managers (AMG) Q3 Earnings Beat on Higher Revenues
Affiliated Managers Group Inc.’s (AMG - Free Report) third-quarter 2021 economic earnings of $4.00 per share surpassed the Zacks Consensus Estimate of $3.93. The bottom line grew 22.3% year over year.
Results were aided by an improvement in revenues and growth in assets under management (AUM) balance, partly offset by higher expenses. Further, the company had a robust liquidity position.
Economic net income was $168.5 million, up 10.8% from the prior-year quarter.
Revenues & AUM Improve, Expenses Rise
Total revenues improved 16.2% year over year to $575.2 million. However, the top line lagged the Zacks Consensus Estimate of $599.7 million.
Adjusted EBITDA was $227.7 million, jumping 25.7% from the year-ago quarter.
Total expenses increased 10.1% year over year to $395.3 million. An increase in all cost components, except for intangible amortization and impairment costs, and depreciation and other amortization costs, led to the rise.
As of Sep 30, 2021, total AUM was $747.8 billion, up 14.4% year over year. Net client cash inflows in the quarter were $3.3 billion.
Capital & Liquidity Position Decent
As of Sep 30, 2021, Affiliated Managers had $1.13 billion in cash and cash equivalents compared with $1.04 billion as of Dec 31, 2020. The company had $2.49 billion of debt, which increased 7.8% from the Dec 31, 2020 level.
Shareholders’ equity as of Sep 30, 2021, was $2.64 billion compared with $2.78 billion as of Dec 31, 2020.
Share Repurchase Update
In the reported quarter, the company repurchased shares worth $100 million.
Our Take
In October 2021, Affiliated Managers completed the deal to acquire a majority equity stake in Parnassus Investments, which is expected to increase its ESG-focused AUM balance. Recently, the company announced a partnership deal with Abacus Capital Group, which will likely enhance its participation in private markets.
Affiliated Managers remains well-positioned for growth on the back of successful partnerships and global distribution capability along with a diverse product mix. However, the presence of substantial intangible assets on the company's balance sheet remains a concern.
Affiliated Managers Group, Inc. Price, Consensus and EPS Surprise
Affiliated Managers Group, Inc. price-consensus-eps-surprise-chart | Affiliated Managers Group, Inc. Quote
Affiliated Managers currently 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 Asset Managers
BlackRock, Inc.’s (BLK - Free Report) third-quarter 2021 adjusted earnings of $10.95 per share outpaced the Zacks Consensus Estimate of $9.63. The figure reflects a rise of 18.8% from the year-ago quarter’s number.
Blackstone’s (BX - Free Report) third-quarter 2021 distributable earnings of $1.28 per share comfortably surpassed the Zacks Consensus Estimate of 93 cents. The figure reflects a significant rise from 63 cents recorded in the prior-year quarter.
SEI Investments Co.’s (SEIC - Free Report) third-quarter 2021 earnings of 97 cents per share met the Zacks Consensus Estimate. The bottom line reflected 29% growth from the prior-year quarter.