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SEI Investments (SEIC) Q1 Earnings Miss on Lower Revenues
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SEI Investments Co.’s (SEIC - Free Report) first-quarter 2023 earnings of 79 cents per share missed the Zacks Consensus Estimate of 82 cents. The bottom line reflects a decline of 41.9% from the prior-year quarter. Our estimate for earnings was 78 cents.
Results were adversely impacted by lower revenues. Also, marginally higher expenses created a headwind. Nevertheless, an increase in the assets under management (AUM) balance positively impacted the results in the quarter.
Net income was $107 million, down 43.8% from the year-ago quarter. Our estimate for the metric was $105.5 million.
Revenues Decline, Expenses & AUM Increase
Total revenues were $469.1 million, down 19.3% year over year. The fall was due to lower asset management, administration and distribution fees, and information processing and software servicing fees. The top line missed the Zacks Consensus Estimate of $470.2 million. Our estimate for revenues was $468.9 million.
Total expenses were $367.4 million, rising marginally from the prior-year quarter. The rise was due to an increase in compensation, benefits and other personnel costs; data processing and computer-related expenses; facilities, supplies and other costs; and depreciation costs. Our estimate for expenses was $374.6 million.
Operating income plunged 52.6% year over year to $101.8 million.
As of Mar 31, 2023, AUM was $410.2 billion, reflecting a rise of 6.5% from the prior-year quarter. Our estimate for AUM was $371.5 billion. Client assets under administration (AUA) were $850.1 billion, down 5.5%. Our estimate for the metric was $803.3 billion. Client AUA did not include $12.1 billion related to Funds of Funds assets reported on Mar 31, 2023.
Share Repurchase Update
In the reported quarter, SEI Investments bought back 1.4 million shares for $80.3 million.
Conclusion
Persistently rising expenses are expected to hurt the company’s bottom line to an extent in the near term. SEIC’s increased exposure to fee-based revenues is another major concern. However, its robust AUM balance, global presence and diverse range of product offerings are expected to continue to drive growth.
SEI Investments Company Price, Consensus and EPS Surprise
Performance & Earnings Release Date of Other Asset Managers
BlackRock, Inc.’s (BLK - Free Report) first-quarter 2023 adjusted earnings of $7.93 per share surpassed the Zacks Consensus Estimate of $7.71. However, the figure reflects a decrease of 16.7% from the year-ago quarter. Our estimate for adjusted earnings was $7.37.
BLK’s results benefited from a decline in expenses. However, lower revenues and assets under management balance were major headwinds for BLK.
Invesco Ltd. (IVZ - Free Report) is scheduled to announce first-quarter 2023 numbers on Apr 25.
Over the past month, the Zacks Consensus Estimate for IVZ’s quarterly earnings has moved 6.1% northward to 35 cents. However, it implies a 37.5% decline from the prior-year reported number.
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SEI Investments (SEIC) Q1 Earnings Miss on Lower Revenues
SEI Investments Co.’s (SEIC - Free Report) first-quarter 2023 earnings of 79 cents per share missed the Zacks Consensus Estimate of 82 cents. The bottom line reflects a decline of 41.9% from the prior-year quarter. Our estimate for earnings was 78 cents.
Results were adversely impacted by lower revenues. Also, marginally higher expenses created a headwind. Nevertheless, an increase in the assets under management (AUM) balance positively impacted the results in the quarter.
Net income was $107 million, down 43.8% from the year-ago quarter. Our estimate for the metric was $105.5 million.
Revenues Decline, Expenses & AUM Increase
Total revenues were $469.1 million, down 19.3% year over year. The fall was due to lower asset management, administration and distribution fees, and information processing and software servicing fees. The top line missed the Zacks Consensus Estimate of $470.2 million. Our estimate for revenues was $468.9 million.
Total expenses were $367.4 million, rising marginally from the prior-year quarter. The rise was due to an increase in compensation, benefits and other personnel costs; data processing and computer-related expenses; facilities, supplies and other costs; and depreciation costs. Our estimate for expenses was $374.6 million.
Operating income plunged 52.6% year over year to $101.8 million.
As of Mar 31, 2023, AUM was $410.2 billion, reflecting a rise of 6.5% from the prior-year quarter. Our estimate for AUM was $371.5 billion. Client assets under administration (AUA) were $850.1 billion, down 5.5%. Our estimate for the metric was $803.3 billion. Client AUA did not include $12.1 billion related to Funds of Funds assets reported on Mar 31, 2023.
Share Repurchase Update
In the reported quarter, SEI Investments bought back 1.4 million shares for $80.3 million.
Conclusion
Persistently rising expenses are expected to hurt the company’s bottom line to an extent in the near term. SEIC’s increased exposure to fee-based revenues is another major concern. However, its robust AUM balance, global presence and diverse range of product offerings are expected to continue to drive growth.
SEI Investments Company Price, Consensus and EPS Surprise
SEI Investments Company price-consensus-eps-surprise-chart | SEI Investments Company Quote
Currently, SEI Investments carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Performance & Earnings Release Date of Other Asset Managers
BlackRock, Inc.’s (BLK - Free Report) first-quarter 2023 adjusted earnings of $7.93 per share surpassed the Zacks Consensus Estimate of $7.71. However, the figure reflects a decrease of 16.7% from the year-ago quarter. Our estimate for adjusted earnings was $7.37.
BLK’s results benefited from a decline in expenses. However, lower revenues and assets under management balance were major headwinds for BLK.
Invesco Ltd. (IVZ - Free Report) is scheduled to announce first-quarter 2023 numbers on Apr 25.
Over the past month, the Zacks Consensus Estimate for IVZ’s quarterly earnings has moved 6.1% northward to 35 cents. However, it implies a 37.5% decline from the prior-year reported number.