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Invesco (IVZ) Q2 Earnings & Revenues Miss, AUM Balance Down
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Invesco’s (IVZ - Free Report) second-quarter 2022 adjusted earnings of 39 cents per share missed the Zacks Consensus Estimate of 52 cents by a significant margin. The bottom line also plunged 50% from the prior-year quarter.
Shares of IVZ lost 2.8% in the pre-market trading in response to lower-than-expected quarterly performance. The full-day trading session will display a clearer picture.
Results were adversely impacted by lower assets under management (AUM) balance and long-term outflows, which hurt revenues. However, a slight decline in operating expenses was a tailwind.
On a GAAP basis, net income attributable to common shareholders was $21 million or 26 cents per share, down substantially from $368.3 million or 78 cents per share a year ago.
Revenues & Expenses Down
Adjusted net revenues were $1.17 billion, falling 9.9% year over year. The top line lagged the Zacks Consensus Estimate of $1.20 billion.
Adjusted operating expenses were $762 million, down marginally. Invesco achieved the targeted $200 million in annualized net savings well ahead of the schedule.
Adjusted operating margin was 35.1%, down from 41.5% a year ago.
AUM Balance Falls
As of Jun 30, 2022, AUM was $1.39 trillion, which declined 8.8% year over year. Average AUM at second-quarter end totaled $1.46 trillion, down 1.6%.
The company witnessed long-term net outflows of $6.8 billion during the quarter.
Strong Balance Sheet
As of Jun 30, 2022, cash and cash equivalents were $936.8 billion, down 28.5% sequentially.
Further, long-term debt amounted to $1.67 billion. The credit facility balance was $184.6 million as of Jun 30, 2022. During the quarter, IVZ redeemed the $600 million senior notes due Nov 30, 2022.
Our View
Invesco remains well-poised to benefit from its global footprint, product offerings and strategic buyouts. However, elevated expenses, a challenging market environment and high debt levels are major near-term concerns.
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.
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.
SEIC’s Results were hurt by a rise in expenses. However, growth in revenues and an increase in AUM balance were tailwinds.
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Invesco (IVZ) Q2 Earnings & Revenues Miss, AUM Balance Down
Invesco’s (IVZ - Free Report) second-quarter 2022 adjusted earnings of 39 cents per share missed the Zacks Consensus Estimate of 52 cents by a significant margin. The bottom line also plunged 50% from the prior-year quarter.
Shares of IVZ lost 2.8% in the pre-market trading in response to lower-than-expected quarterly performance. The full-day trading session will display a clearer picture.
Results were adversely impacted by lower assets under management (AUM) balance and long-term outflows, which hurt revenues. However, a slight decline in operating expenses was a tailwind.
On a GAAP basis, net income attributable to common shareholders was $21 million or 26 cents per share, down substantially from $368.3 million or 78 cents per share a year ago.
Revenues & Expenses Down
Adjusted net revenues were $1.17 billion, falling 9.9% year over year. The top line lagged the Zacks Consensus Estimate of $1.20 billion.
Adjusted operating expenses were $762 million, down marginally. Invesco achieved the targeted $200 million in annualized net savings well ahead of the schedule.
Adjusted operating margin was 35.1%, down from 41.5% a year ago.
AUM Balance Falls
As of Jun 30, 2022, AUM was $1.39 trillion, which declined 8.8% year over year. Average AUM at second-quarter end totaled $1.46 trillion, down 1.6%.
The company witnessed long-term net outflows of $6.8 billion during the quarter.
Strong Balance Sheet
As of Jun 30, 2022, cash and cash equivalents were $936.8 billion, down 28.5% sequentially.
Further, long-term debt amounted to $1.67 billion. The credit facility balance was $184.6 million as of Jun 30, 2022. During the quarter, IVZ redeemed the $600 million senior notes due Nov 30, 2022.
Our View
Invesco remains well-poised to benefit from its global footprint, product offerings and strategic buyouts. However, elevated expenses, a challenging market environment and high debt levels are major near-term concerns.
Invesco Ltd. Price, Consensus and EPS Surprise
Invesco Ltd. price-consensus-eps-surprise-chart | Invesco Ltd. Quote
Currently, IVZ carries a Zacks Rank #5 (Strong Sell).
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) 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.
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.
SEIC’s Results were hurt by a rise in expenses. However, growth in revenues and an increase in AUM balance were tailwinds.