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Affiliated Managers (AMG) Q4 Earnings Beat on Lower Expenses
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Affiliated Managers Group Inc.’s (AMG - Free Report) fourth-quarter 2022 economic earnings of $7.28 per share handily surpassed the Zacks Consensus Estimate of $7.03. The bottom line grew 19.3% from the prior-year number. Our estimate for economic earnings per share was $6.45.
Results were aided by lower expenses, partly offset by a decline in revenues and a fall in assets under management (AUM) balance. Further, the company had a robust liquidity position.
Economic net income was $285.2 million, up 11.7% from the prior-year quarter. Our estimate for this metric was $250.4 million.
In 2022, economic earnings per share of $20.14 beat the consensus estimate of $19.91 and increased 10.2% year over year. Economic net income was $802.1 million, up 2.9%. Our estimates for economic net income and economic earnings per share were $767.3 million and $13.84, respectively.
Revenues & Expenses Decline, AUM Falls
Total revenues in the fourth quarter declined 22% year over year to $539.6 million. Also, the top line lagged the Zacks Consensus Estimate of $599.4 million. Our estimate for total revenues was $562.3 million.
In 2022, total revenues were $2.33 billion, down 3.4%. The top line also missed the consensus estimate of $2.39 billion. We had projected it to be $2.35 billion.
Adjusted EBITDA was $371.3 million, up 4.1% from the year-ago quarter.
Total expenses decreased 3.3% to $452.4 million. Lower compensation and related expenses and net other expenses largely led to the fall.
As of Dec 31, 2022, total AUM was $650.8 billion, which declined 20%. Net client cash outflows in the quarter were $35.4 billion. Our estimate for AUM was $648.5 billion.
Capital & Liquidity Position Decent
As of Dec 31, 2022, Affiliated Managers had $429.2 million in cash and cash equivalents compared with $908.5 billion as of Dec 31, 2021. The company had $2.54 billion of debt, which increased 1.8% from the Dec 31, 2021 level.
Shareholders’ equity as of Dec 31, 2022, was $3.23 billion compared with $2.79 billion as of Dec 31, 2021.
Share Repurchase Update
In the reported quarter, the company repurchased shares worth $130 million.
In addition, AMG entered into a seven-month $225 million accelerated share repurchase program.
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, substantial intangible assets on the company's balance sheet and the tough operating backdrop are major concerns.
Affiliated Managers Group, Inc. Price, Consensus and EPS Surprise
Franklin Resources Inc.’s (BEN - Free Report) first-quarter fiscal 2023 (ended Dec 31, 2022) adjusted earnings of 51 cents per share lagged the Zacks Consensus Estimate of 54 cents. The bottom line declined 53% from the prior-year quarter. Our estimate for earnings was 52 cents.
BEN’s results have been hurt by a decline in revenues and higher expenses. A fall in AUM was another major drag. Nevertheless, the company’s balance sheet position remained robust in the quarter under review.
Lazard Ltd.’s (LAZ - Free Report) fourth-quarter 2022 adjusted net income of 69 cents per share missed the Zacks Consensus Estimate of 72 cents. The reported figure reflects a decline of 64% on a year-over-year basis.
Results were hurt by a decline in revenues. A decrease in AUM balance on net outflows was another headwind. However, the company’s balance sheet position remained robust. Lower expenses aided the results to some extent.
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Affiliated Managers (AMG) Q4 Earnings Beat on Lower Expenses
Affiliated Managers Group Inc.’s (AMG - Free Report) fourth-quarter 2022 economic earnings of $7.28 per share handily surpassed the Zacks Consensus Estimate of $7.03. The bottom line grew 19.3% from the prior-year number. Our estimate for economic earnings per share was $6.45.
Results were aided by lower expenses, partly offset by a decline in revenues and a fall in assets under management (AUM) balance. Further, the company had a robust liquidity position.
Economic net income was $285.2 million, up 11.7% from the prior-year quarter. Our estimate for this metric was $250.4 million.
In 2022, economic earnings per share of $20.14 beat the consensus estimate of $19.91 and increased 10.2% year over year. Economic net income was $802.1 million, up 2.9%. Our estimates for economic net income and economic earnings per share were $767.3 million and $13.84, respectively.
Revenues & Expenses Decline, AUM Falls
Total revenues in the fourth quarter declined 22% year over year to $539.6 million. Also, the top line lagged the Zacks Consensus Estimate of $599.4 million. Our estimate for total revenues was $562.3 million.
In 2022, total revenues were $2.33 billion, down 3.4%. The top line also missed the consensus estimate of $2.39 billion. We had projected it to be $2.35 billion.
Adjusted EBITDA was $371.3 million, up 4.1% from the year-ago quarter.
Total expenses decreased 3.3% to $452.4 million. Lower compensation and related expenses and net other expenses largely led to the fall.
As of Dec 31, 2022, total AUM was $650.8 billion, which declined 20%. Net client cash outflows in the quarter were $35.4 billion. Our estimate for AUM was $648.5 billion.
Capital & Liquidity Position Decent
As of Dec 31, 2022, Affiliated Managers had $429.2 million in cash and cash equivalents compared with $908.5 billion as of Dec 31, 2021. The company had $2.54 billion of debt, which increased 1.8% from the Dec 31, 2021 level.
Shareholders’ equity as of Dec 31, 2022, was $3.23 billion compared with $2.79 billion as of Dec 31, 2021.
Share Repurchase Update
In the reported quarter, the company repurchased shares worth $130 million.
In addition, AMG entered into a seven-month $225 million accelerated share repurchase program.
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, substantial intangible assets on the company's balance sheet and the tough operating backdrop are major concerns.
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 #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Performance of Other Asset Managers
Franklin Resources Inc.’s (BEN - Free Report) first-quarter fiscal 2023 (ended Dec 31, 2022) adjusted earnings of 51 cents per share lagged the Zacks Consensus Estimate of 54 cents. The bottom line declined 53% from the prior-year quarter. Our estimate for earnings was 52 cents.
BEN’s results have been hurt by a decline in revenues and higher expenses. A fall in AUM was another major drag. Nevertheless, the company’s balance sheet position remained robust in the quarter under review.
Lazard Ltd.’s (LAZ - Free Report) fourth-quarter 2022 adjusted net income of 69 cents per share missed the Zacks Consensus Estimate of 72 cents. The reported figure reflects a decline of 64% on a year-over-year basis.
Results were hurt by a decline in revenues. A decrease in AUM balance on net outflows was another headwind. However, the company’s balance sheet position remained robust. Lower expenses aided the results to some extent.