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Affiliated Managers (AMG) Q3 Earnings Top Estimates, AUM Down
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Affiliated Managers Group Inc.’s (AMG - Free Report) third-quarter 2022 economic earnings of $4.21 per share handily surpassed the Zacks Consensus Estimate of $3.92. The bottom line grew 5.3% from the prior-year number. Our estimate for economic earnings per share was $3.96.
Results were aided by an improvement in revenues, partly offset by higher expenses and a fall in assets under management (AUM) balance. Further, the company had a robust liquidity position.
Economic net income was $166.4 million, down 1.2% from the prior-year quarter. Our estimate for this metric was $156.1 million.
Revenues & Expenses Rise, AUM Falls
Total revenues rose marginally year over year to $578.6 million. Also, the top line beat the Zacks Consensus Estimate of $553.3 million. Our estimate for total revenues was $564.8 million.
Adjusted EBITDA was $220.4 million, down 3.2% from the year-ago quarter.
Total expenses increased 7.6% to $425.4 million. An increase in all cost components, except for depreciation and other amortization, and other expenses, led to the rise.
As of Sep 30, 2022, total AUM was $644.6 billion, which declined 13.8%. Net client cash outflows in the quarter were $8.8 billion.
Capital & Liquidity Position Decent
As of Sep 30, 2022, Affiliated Managers had $622.9 million in cash and cash equivalents compared with $908.5 billion as of Dec 31, 2021. The company had $2.53 billion of debt, which increased 1.8% from the Dec 31, 2021 level.
Shareholders’ equity as of Sep 30, 2022, was $2.77 billion compared with $2.79 billion as of Dec 31, 2021.
Share Repurchase Update
In the reported quarter, the company repurchased shares worth $80 million.
In addition, AMG increased the share repurchase authorization to 5.8 million shares.
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. However, the presence of substantial intangible assets on the company's balance sheet and the tough operating backdrop are major concerns. Mounting expenses are hurting the bottom-line growth.
Affiliated Managers Group, Inc. Price, Consensus and EPS Surprise
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.
Results benefited from a decline in expenses. However, lower revenues and AUM balance were the major headwinds for BLK.
Invesco’s (IVZ - Free Report) third-quarter 2022 adjusted earnings of 34 cents per share 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.
Results were adversely impacted by lower AUM balance and long-term outflows, which hurt revenues. However, a decline in operating expenses was a tailwind for Invesco.
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Affiliated Managers (AMG) Q3 Earnings Top Estimates, AUM Down
Affiliated Managers Group Inc.’s (AMG - Free Report) third-quarter 2022 economic earnings of $4.21 per share handily surpassed the Zacks Consensus Estimate of $3.92. The bottom line grew 5.3% from the prior-year number. Our estimate for economic earnings per share was $3.96.
Results were aided by an improvement in revenues, partly offset by higher expenses and a fall in assets under management (AUM) balance. Further, the company had a robust liquidity position.
Economic net income was $166.4 million, down 1.2% from the prior-year quarter. Our estimate for this metric was $156.1 million.
Revenues & Expenses Rise, AUM Falls
Total revenues rose marginally year over year to $578.6 million. Also, the top line beat the Zacks Consensus Estimate of $553.3 million. Our estimate for total revenues was $564.8 million.
Adjusted EBITDA was $220.4 million, down 3.2% from the year-ago quarter.
Total expenses increased 7.6% to $425.4 million. An increase in all cost components, except for depreciation and other amortization, and other expenses, led to the rise.
As of Sep 30, 2022, total AUM was $644.6 billion, which declined 13.8%. Net client cash outflows in the quarter were $8.8 billion.
Capital & Liquidity Position Decent
As of Sep 30, 2022, Affiliated Managers had $622.9 million in cash and cash equivalents compared with $908.5 billion as of Dec 31, 2021. The company had $2.53 billion of debt, which increased 1.8% from the Dec 31, 2021 level.
Shareholders’ equity as of Sep 30, 2022, was $2.77 billion compared with $2.79 billion as of Dec 31, 2021.
Share Repurchase Update
In the reported quarter, the company repurchased shares worth $80 million.
In addition, AMG increased the share repurchase authorization to 5.8 million shares.
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. However, the presence of substantial intangible assets on the company's balance sheet and the tough operating backdrop are major concerns. Mounting expenses are hurting the bottom-line growth.
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 #4 (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) 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.
Results benefited from a decline in expenses. However, lower revenues and AUM balance were the major headwinds for BLK.
Invesco’s (IVZ - Free Report) third-quarter 2022 adjusted earnings of 34 cents per share 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.
Results were adversely impacted by lower AUM balance and long-term outflows, which hurt revenues. However, a decline in operating expenses was a tailwind for Invesco.