We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Moelis & Company (MC) Q3 Earnings Top, Revenues & Costs Down
Read MoreHide Full Article
Moelis & Company’s (MC - Free Report) third-quarter 2022 adjusted earnings per share of 37 cents handily surpassed the Zacks Consensus Estimate of 32 cents. The bottom line, however, reflects a plunge of 79% from the prior-year quarter.
Results largely benefited from a decrease in expenses. Also, the company had a solid liquidity position in the reported quarter. However, lower revenues were the headwind.
Net income (GAAP basis) was $28.6 million, down 80% from the prior-year quarter.
Revenues & Expenses Decline
Total revenues (GAAP basis) tanked 52% year over year to $233.5 million. The fall was primarily due to fewer transaction completions. The top line beat the Zacks Consensus Estimate of $208.4 million.
Total operating expenses (GAAP basis) were $198.5 million, down 41%. The fall was due to a decline in compensation and benefits costs.
Other income (GAAP basis) was $2.6 million in the reported quarter compared with other income of $30.4 million in the prior-year quarter.
As of Sep 30, 2022, the company had cash and liquid investments of $340.9 million, with no debt or goodwill.
Share Repurchase Update
During the reported quarter, Moelis & Company repurchased 0.6 million shares for $13.5 million.
Our View
Elevated expenses resulting from the continuous hiring spree and inflationary pressure will likely hurt Moelis & Company’s bottom-line growth. Also, heightened geopolitical and macroeconomic uncertainties will continue to adversely impact the company’s financials. Yet, global expansion initiatives and diverse operations across sectors and industries bode well.
Moelis & Company Price, Consensus and EPS Surprise
Raymond James’ (RJF - Free Report) fourth-quarter fiscal 2022 (ended Sep 30) adjusted earnings of $2.08 per share surpassed the Zacks Consensus Estimate of $2.00. The bottom line was, however, down 2% from the prior-year quarter.
Higher interest rates and a rise in loan demand acted as tailwinds, which led to a solid rise in net interest income (NII). Further, the performance of the Private Client Group was impressive. Also, the acquisitions over the past years supported the company’s financials to some extent.
Yet, a rise in expenses and poor investment banking performance due to heightened geopolitical and macroeconomic ambiguities were the undermining factors. Also, RJF recorded bank loan provision for credit losses during the quarter, which indicates “a weaker macroeconomic outlook.”
Evercore Inc.’s (EVR - Free Report) third-quarter 2022 adjusted earnings per share of $2.20 outpaced the Zacks Consensus Estimate of $1.35. However, the bottom line was 44% down from the prior-year quarter.
While the decline in the net revenues of the Investment Banking and Investment Management segments affected the overall top line, a decline in expenses alleviated the bottom-line pressure. Amid a challenging environment, EVR saw a decline in assets under management.
Unique Zacks Analysis of Your Chosen Ticker
Pick one free report - opportunity may be withdrawn at any time
Image: Bigstock
Moelis & Company (MC) Q3 Earnings Top, Revenues & Costs Down
Moelis & Company’s (MC - Free Report) third-quarter 2022 adjusted earnings per share of 37 cents handily surpassed the Zacks Consensus Estimate of 32 cents. The bottom line, however, reflects a plunge of 79% from the prior-year quarter.
Results largely benefited from a decrease in expenses. Also, the company had a solid liquidity position in the reported quarter. However, lower revenues were the headwind.
Net income (GAAP basis) was $28.6 million, down 80% from the prior-year quarter.
Revenues & Expenses Decline
Total revenues (GAAP basis) tanked 52% year over year to $233.5 million. The fall was primarily due to fewer transaction completions. The top line beat the Zacks Consensus Estimate of $208.4 million.
Total operating expenses (GAAP basis) were $198.5 million, down 41%. The fall was due to a decline in compensation and benefits costs.
Other income (GAAP basis) was $2.6 million in the reported quarter compared with other income of $30.4 million in the prior-year quarter.
As of Sep 30, 2022, the company had cash and liquid investments of $340.9 million, with no debt or goodwill.
Share Repurchase Update
During the reported quarter, Moelis & Company repurchased 0.6 million shares for $13.5 million.
Our View
Elevated expenses resulting from the continuous hiring spree and inflationary pressure will likely hurt Moelis & Company’s bottom-line growth. Also, heightened geopolitical and macroeconomic uncertainties will continue to adversely impact the company’s financials. Yet, global expansion initiatives and diverse operations across sectors and industries bode well.
Moelis & Company Price, Consensus and EPS Surprise
Moelis & Company price-consensus-eps-surprise-chart | Moelis & Company Quote
Currently, Moelis & Company 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 Investment Banks
Raymond James’ (RJF - Free Report) fourth-quarter fiscal 2022 (ended Sep 30) adjusted earnings of $2.08 per share surpassed the Zacks Consensus Estimate of $2.00. The bottom line was, however, down 2% from the prior-year quarter.
Higher interest rates and a rise in loan demand acted as tailwinds, which led to a solid rise in net interest income (NII). Further, the performance of the Private Client Group was impressive. Also, the acquisitions over the past years supported the company’s financials to some extent.
Yet, a rise in expenses and poor investment banking performance due to heightened geopolitical and macroeconomic ambiguities were the undermining factors. Also, RJF recorded bank loan provision for credit losses during the quarter, which indicates “a weaker macroeconomic outlook.”
Evercore Inc.’s (EVR - Free Report) third-quarter 2022 adjusted earnings per share of $2.20 outpaced the Zacks Consensus Estimate of $1.35. However, the bottom line was 44% down from the prior-year quarter.
While the decline in the net revenues of the Investment Banking and Investment Management segments affected the overall top line, a decline in expenses alleviated the bottom-line pressure. Amid a challenging environment, EVR saw a decline in assets under management.