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SEI Investments Co.’s (SEIC - Free Report) second-quarter 2022 earnings of 81 cents per share lagged the Zacks Consensus Estimate by a penny. The bottom line reflects a decline of 12.9% from the prior-year quarter.
Results were hurt by a rise in expenses. However, growth in revenues and an increase in assets under management (AUM) balance were tailwinds.
Net income was $111.3 million, down 16.8% from the year-ago quarter.
Revenues, Expenses & AUM Rise
Total revenues were $481.7 million, up 1.3% year over year. The upswing reflects an increase in both asset management, administration and distribution fees, and information processing and software servicing fees. The top line beat the Zacks Consensus Estimate of $471.7 million.
Total expenses were $365.8 million, up 7.7% year over year. The rise was due to an increase in all cost components, except for sub-advisory, distribution and other asset management costs, software royalties and other information processing costs, stock-based compensation expenses and depreciation charges.
Operating income declined 14.8% year over year to $115.9 million.
As of Jun 30, 2022, AUM was $403.6 billion, reflecting a rise of 1.1% from the prior-year quarter. Client assets under administration (AUA) were $889 billion, up 1% year over year. Client AUA did not include $12.9 billion related to Funds of Funds assets reported on Jun 30, 2022.
Share Repurchase Update
In the reported quarter, SEI Investments bought back 2 million shares for $109.3 million.
Conclusion
Persistently rising expenses (as witnessed in the second quarter) are expected to hurt the company’s bottom line to an extent in the near term. SEIC’s increased exposure to fee-based revenues remains another major concern. Nevertheless, its robust AUM balance, global presence and diverse range of product offerings are expected to continue to drive growth.
SEI Investments Company Price, Consensus and EPS Surprise
Performance & Earnings Release Date of Other Asset Managers
BlackRock, Inc.’s (BLK - Free Report) second-quarter 2022 adjusted earnings of $7.36 per share missed the Zacks Consensus Estimate of $8.33. The figure reflects a decrease of 30% from the year-ago quarter.
BLK’s results were adversely impacted by an unfavorable operating backdrop, leading to lower revenues and AUM balance. A modest decline in expenses was a tailwind.
Invesco Ltd. (IVZ - Free Report) is scheduled to announce second-quarter 2022 numbers on Jul 27.
Over the past month, the Zacks Consensus Estimate for IVZ’s quarterly earnings has moved 10% south to 54 cents, implying a 30.8% decline from the prior-year reported number.
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SEI Investments (SEIC) Q2 Earnings Miss, Costs & AUM Rise Y/Y
SEI Investments Co.’s (SEIC - Free Report) second-quarter 2022 earnings of 81 cents per share lagged the Zacks Consensus Estimate by a penny. The bottom line reflects a decline of 12.9% from the prior-year quarter.
Results were hurt by a rise in expenses. However, growth in revenues and an increase in assets under management (AUM) balance were tailwinds.
Net income was $111.3 million, down 16.8% from the year-ago quarter.
Revenues, Expenses & AUM Rise
Total revenues were $481.7 million, up 1.3% year over year. The upswing reflects an increase in both asset management, administration and distribution fees, and information processing and software servicing fees. The top line beat the Zacks Consensus Estimate of $471.7 million.
Total expenses were $365.8 million, up 7.7% year over year. The rise was due to an increase in all cost components, except for sub-advisory, distribution and other asset management costs, software royalties and other information processing costs, stock-based compensation expenses and depreciation charges.
Operating income declined 14.8% year over year to $115.9 million.
As of Jun 30, 2022, AUM was $403.6 billion, reflecting a rise of 1.1% from the prior-year quarter. Client assets under administration (AUA) were $889 billion, up 1% year over year. Client AUA did not include $12.9 billion related to Funds of Funds assets reported on Jun 30, 2022.
Share Repurchase Update
In the reported quarter, SEI Investments bought back 2 million shares for $109.3 million.
Conclusion
Persistently rising expenses (as witnessed in the second quarter) are expected to hurt the company’s bottom line to an extent in the near term. SEIC’s increased exposure to fee-based revenues remains another major concern. Nevertheless, its robust AUM balance, global presence and diverse range of product offerings are expected to continue to drive growth.
SEI Investments Company Price, Consensus and EPS Surprise
SEI Investments Company price-consensus-eps-surprise-chart | SEI Investments Company Quote
Currently, SEI Investments carries a Zacks Rank #4 (Sell).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Performance & Earnings Release Date of Other Asset Managers
BlackRock, Inc.’s (BLK - Free Report) second-quarter 2022 adjusted earnings of $7.36 per share missed the Zacks Consensus Estimate of $8.33. The figure reflects a decrease of 30% from the year-ago quarter.
BLK’s results were adversely impacted by an unfavorable operating backdrop, leading to lower revenues and AUM balance. A modest decline in expenses was a tailwind.
Invesco Ltd. (IVZ - Free Report) is scheduled to announce second-quarter 2022 numbers on Jul 27.
Over the past month, the Zacks Consensus Estimate for IVZ’s quarterly earnings has moved 10% south to 54 cents, implying a 30.8% decline from the prior-year reported number.