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Invesco (IVZ) Stock Dips on Q3 Earnings Miss, AUM Balance Down
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Invesco’s (IVZ - Free Report) third-quarter 2022 adjusted earnings of 34 cents per share have missed the Zacks Consensus Estimate of 43 cents by a significant margin. The bottom line plunged 55.8% from the prior-year quarter. Our estimate for earnings was 49 cents.
Shares of IVZ lost 1.1% in pre-market trading in response to the lower-than-expected quarterly performance. The full-day trading session will display a clearer picture.
Results have been adversely impacted by lower assets under management (AUM) balance and long-term outflows, which hurt revenues. However, a decline in operating expenses was a tailwind.
On a GAAP basis, net income attributable to common shareholders was $177.4 million or 39 cents per share, down from $330.1 million or 71 cents per share a year ago.
Revenues & Expenses Decline
Adjusted net revenues were $1.11 billion, falling 16.7% year over year. The top line lagged the Zacks Consensus Estimate of $1.14 billion. Our estimate for revenues was $1.16 billion.
Adjusted operating expenses were $741.2 million, down 4% year over year.
The adjusted operating margin was 33.3%, down from 42.1% a year ago.
AUM Balance Falls
As of Sep 30, 2022, AUM was $1.32 trillion, which declined 13.4% year over year. Average AUM at the third-quarter end totaled $1.42 trillion, down 8.1%.
The company witnessed long-term net outflows of $7.7 billion in the quarter.
Balance Sheet Strong
As of Sep 30, 2022, cash and cash equivalents were $1.02 billion compared with $1.90 billion as of Dec 31, 2021.
Long-term debt amounted to $1.49 billion. The credit facility balance was $0 as of Sep 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.
Performance & Earnings Date of Other Asset Managers
BlackRock, Inc.’s (BLK - Free Report) third-quarter 2022 adjusted earnings of $9.55 per share surpassed the Zacks Consensus Estimate of $7.93. The figure reflects a decrease of 15.8% from the year-ago quarter.
BLK’s results benefited from a decline in expenses. However, lower revenues and AUM balance were major headwinds.
Virtus Investment Partners, Inc. (VRTS - Free Report) is slated to report third-quarter 2022 results on Oct 26.
Over the past seven days, the Zacks Consensus Estimate for Virtus Investment’s quarterly earnings has moved marginally lower to $6.39. This indicates a 34.2% fall from the prior-year quarter.
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Invesco (IVZ) Stock Dips on Q3 Earnings Miss, AUM Balance Down
Invesco’s (IVZ - Free Report) third-quarter 2022 adjusted earnings of 34 cents per share have missed the Zacks Consensus Estimate of 43 cents by a significant margin. The bottom line plunged 55.8% from the prior-year quarter. Our estimate for earnings was 49 cents.
Shares of IVZ lost 1.1% in pre-market trading in response to the lower-than-expected quarterly performance. The full-day trading session will display a clearer picture.
Results have been adversely impacted by lower assets under management (AUM) balance and long-term outflows, which hurt revenues. However, a decline in operating expenses was a tailwind.
On a GAAP basis, net income attributable to common shareholders was $177.4 million or 39 cents per share, down from $330.1 million or 71 cents per share a year ago.
Revenues & Expenses Decline
Adjusted net revenues were $1.11 billion, falling 16.7% year over year. The top line lagged the Zacks Consensus Estimate of $1.14 billion. Our estimate for revenues was $1.16 billion.
Adjusted operating expenses were $741.2 million, down 4% year over year.
The adjusted operating margin was 33.3%, down from 42.1% a year ago.
AUM Balance Falls
As of Sep 30, 2022, AUM was $1.32 trillion, which declined 13.4% year over year. Average AUM at the third-quarter end totaled $1.42 trillion, down 8.1%.
The company witnessed long-term net outflows of $7.7 billion in the quarter.
Balance Sheet Strong
As of Sep 30, 2022, cash and cash equivalents were $1.02 billion compared with $1.90 billion as of Dec 31, 2021.
Long-term debt amounted to $1.49 billion. The credit facility balance was $0 as of Sep 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 & Earnings Date of Other Asset Managers
BlackRock, Inc.’s (BLK - Free Report) third-quarter 2022 adjusted earnings of $9.55 per share surpassed the Zacks Consensus Estimate of $7.93. The figure reflects a decrease of 15.8% from the year-ago quarter.
BLK’s results benefited from a decline in expenses. However, lower revenues and AUM balance were major headwinds.
Virtus Investment Partners, Inc. (VRTS - Free Report) is slated to report third-quarter 2022 results on Oct 26.
Over the past seven days, the Zacks Consensus Estimate for Virtus Investment’s quarterly earnings has moved marginally lower to $6.39. This indicates a 34.2% fall from the prior-year quarter.