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Carlyle (CG) Q3 Earnings Beat, Stock Slips on Lower AUM
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Shares of TheCarlyle Group Inc. (CG - Free Report) have slipped 7.7% since the announcement of its third-quarter results, likely reflecting concerns over declines in revenues and assets under management (AUM). Nonetheless, CG reported third-quarter 2022 post-tax distributable earnings per share of $1.42, which outpaced the Zacks Consensus Estimate of $1.04. However, the bottom line declined from $1.54 in the year-ago quarter.
While a decline in AUM and revenues on lower realized performance revenues marred the results, lower expenses alleviated the bottom-line pressure.
Net income attributable to Carlyle was $280.8 million compared with $532.8 million in the prior-year quarter.
Revenues & Expenses Fall
Segmental revenues were $1.40 million, decreasing 8% from the year-ago quarter. However, the top line beat the Zacks Consensus Estimate of $1.08 million.
Fee revenues in the third quarter increased 29.5% year over year to $569.7 million. A rise in fund management fees, net transaction and portfolio advisory fees, and fee-related to performance revenues supported the increase. Realized performance revenues decreased 24.3% to $764.8 million.
Total segmental expenses amounted to $757.3 million, down 4.5% from the prior-year quarter. The decrease was primarily due to a fall in realized performance revenue-related compensation.
AUM Declines
As of Sep 30, 2022, total AUM was $368.7 billion, down 2% from the prior quarter. This was primarily attributed to a high level of realizations, which more than offset new capital raised, as well as the negative FX impacts.
Fee-earning AUM for the reported quarter was $260.2 billion, up marginally from the prior quarter.
Dividend Update
Carlyle’s board of directors announced a quarterly cash dividend of 32.5 cents per share. The dividend will be paid out on Nov 25 to shareholders of record as of Nov 18, 2022.
Conclusion
Carlyle’s efforts to expand operations by entering business avenues are encouraging. An increase in the AUM balance and fund management fees in the future is likely to support its organic growth. However, any rise in expenses is expected to deter bottom-line growth.
Carlyle 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 a 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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Carlyle (CG) Q3 Earnings Beat, Stock Slips on Lower AUM
Shares of The Carlyle Group Inc. (CG - Free Report) have slipped 7.7% since the announcement of its third-quarter results, likely reflecting concerns over declines in revenues and assets under management (AUM). Nonetheless, CG reported third-quarter 2022 post-tax distributable earnings per share of $1.42, which outpaced the Zacks Consensus Estimate of $1.04. However, the bottom line declined from $1.54 in the year-ago quarter.
While a decline in AUM and revenues on lower realized performance revenues marred the results, lower expenses alleviated the bottom-line pressure.
Net income attributable to Carlyle was $280.8 million compared with $532.8 million in the prior-year quarter.
Revenues & Expenses Fall
Segmental revenues were $1.40 million, decreasing 8% from the year-ago quarter. However, the top line beat the Zacks Consensus Estimate of $1.08 million.
Fee revenues in the third quarter increased 29.5% year over year to $569.7 million. A rise in fund management fees, net transaction and portfolio advisory fees, and fee-related to performance revenues supported the increase. Realized performance revenues decreased 24.3% to $764.8 million.
Total segmental expenses amounted to $757.3 million, down 4.5% from the prior-year quarter. The decrease was primarily due to a fall in realized performance revenue-related compensation.
AUM Declines
As of Sep 30, 2022, total AUM was $368.7 billion, down 2% from the prior quarter. This was primarily attributed to a high level of realizations, which more than offset new capital raised, as well as the negative FX impacts.
Fee-earning AUM for the reported quarter was $260.2 billion, up marginally from the prior quarter.
Dividend Update
Carlyle’s board of directors announced a quarterly cash dividend of 32.5 cents per share. The dividend will be paid out on Nov 25 to shareholders of record as of Nov 18, 2022.
Conclusion
Carlyle’s efforts to expand operations by entering business avenues are encouraging. An increase in the AUM balance and fund management fees in the future is likely to support its organic growth. However, any rise in expenses is expected to deter bottom-line growth.
Carlyle Group Inc. Price, Consensus and EPS Surprise
Carlyle Group Inc. price-consensus-eps-surprise-chart | Carlyle Group Inc. Quote
Currently, Carlyle carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Performance of Other Finance Stocks
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 a lower AUM balance and long-term outflows, which hurt revenues. However, a decline in operating expenses was a tailwind for Invesco.