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Affiliated Managers (AMG) Q1 Earnings Beat as Revenues Rise
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Affiliated Managers Group Inc.’s (AMG - Free Report) first-quarter 2022 economic earnings of $4.65 per share handily surpassed the Zacks Consensus Estimate of $4.32. The bottom line increased 8.6% 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 $190 million, up 2.8% from the prior-year quarter.
Revenues & AUM Improve, Expenses Rise
Total revenues rose 8.6% year over year to $607.3 million. However, the top line missed the Zacks Consensus Estimate of $656.4 million.
Adjusted EBITDA was $255.3 million, up 3.4% from the year-ago quarter.
Total expenses increased 4.4% year over year to $395.1 million. An increase in all cost components, except for depreciation and other amortization costs, and other expenses led to the rise.
As of Mar 31, 2022, total AUM was $776.7 billion, up 5.2% year over year. Net client cash outflows in the quarter were $2.2 billion.
Capital & Liquidity Position Decent
As of Mar 31, 2022, Affiliated Managers had $501 million in cash and cash equivalents compared with $908.5 billion as of Dec 31, 2021. The company had $2.58 billion of debt, which increased 3.5% from the Dec 31, 2021 level.
Shareholders’ equity as of Mar 31, 2022, was $2.67 billion compared with $2.79 billion as of Dec 31, 2021.
Share Repurchase Update
In the reported quarter, the company repurchased shares worth $185 million.
Our View
Affiliated Managers remains well-positioned for growth on the back of successful partnerships and global distribution capability, along with a diverse product mix. Its acquisition of the remaining minority equity stake in Systematica is expected to add $18 million in incremental adjusted EBITDA this year, including estimated performance fees.
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) first-quarter 2022 adjusted earnings of $9.52 per share outpaced the Zacks Consensus Estimate of $8.92. The figure reflects a rise of 18.4% from the year-ago quarter.
BLK’s results benefited from an improvement in revenues, partly offset by higher expenses. Moreover, long-term net inflows supported growth in the AUM balance.
SEI Investments Co.’s (SEIC - Free Report) first-quarter 2022 earnings of $1.36 per share were in line with the Zacks Consensus Estimate. The bottom line reflects a 53% jump from the prior-year quarter. The reported quarter comprised a one-time early termination fee of $88 million or 47 cents per share, which was included in information processing and software servicing fees.
SEIC’s results were aided by revenue growth and an increase in the AUM balance. These were offset by a rise in expenses.
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Affiliated Managers (AMG) Q1 Earnings Beat as Revenues Rise
Affiliated Managers Group Inc.’s (AMG - Free Report) first-quarter 2022 economic earnings of $4.65 per share handily surpassed the Zacks Consensus Estimate of $4.32. The bottom line increased 8.6% 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 $190 million, up 2.8% from the prior-year quarter.
Revenues & AUM Improve, Expenses Rise
Total revenues rose 8.6% year over year to $607.3 million. However, the top line missed the Zacks Consensus Estimate of $656.4 million.
Adjusted EBITDA was $255.3 million, up 3.4% from the year-ago quarter.
Total expenses increased 4.4% year over year to $395.1 million. An increase in all cost components, except for depreciation and other amortization costs, and other expenses led to the rise.
As of Mar 31, 2022, total AUM was $776.7 billion, up 5.2% year over year. Net client cash outflows in the quarter were $2.2 billion.
Capital & Liquidity Position Decent
As of Mar 31, 2022, Affiliated Managers had $501 million in cash and cash equivalents compared with $908.5 billion as of Dec 31, 2021. The company had $2.58 billion of debt, which increased 3.5% from the Dec 31, 2021 level.
Shareholders’ equity as of Mar 31, 2022, was $2.67 billion compared with $2.79 billion as of Dec 31, 2021.
Share Repurchase Update
In the reported quarter, the company repurchased shares worth $185 million.
Our View
Affiliated Managers remains well-positioned for growth on the back of successful partnerships and global distribution capability, along with a diverse product mix. Its acquisition of the remaining minority equity stake in Systematica is expected to add $18 million in incremental adjusted EBITDA this year, including estimated performance fees.
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) first-quarter 2022 adjusted earnings of $9.52 per share outpaced the Zacks Consensus Estimate of $8.92. The figure reflects a rise of 18.4% from the year-ago quarter.
BLK’s results benefited from an improvement in revenues, partly offset by higher expenses. Moreover, long-term net inflows supported growth in the AUM balance.
SEI Investments Co.’s (SEIC - Free Report) first-quarter 2022 earnings of $1.36 per share were in line with the Zacks Consensus Estimate. The bottom line reflects a 53% jump from the prior-year quarter. The reported quarter comprised a one-time early termination fee of $88 million or 47 cents per share, which was included in information processing and software servicing fees.
SEIC’s results were aided by revenue growth and an increase in the AUM balance. These were offset by a rise in expenses.