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Invesco (IVZ) Q2 Earnings Miss Estimates, Revenues Decline Y/Y
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Invesco’s (IVZ - Free Report) second-quarter 2023 adjusted earnings of 31 cents per share lagged the Zacks Consensus Estimate of 40 cents. The bottom line plunged 20.5% from the prior-year quarter.
Results have been hurt by a rise in operating expenses and lower revenues. Nevertheless, an increase in the assets under management (AUM) balance has aided the results to some extent.
On a GAAP basis, net income attributable to common shareholders was $132.2 million or 29 cents per share, up from $121 million or 26 cents per share a year ago. Our estimate for net income was $100.1 million.
Revenues Decline, Expenses Rise
Adjusted quarterly net revenues were $1.09 billion, falling 7.1% year over year. The top line missed the Zacks Consensus Estimate of $1.10 billion.
Adjusted operating expenses were $788.7 million, up 3.5% year over year. We expected the metric to be $765.9 million.
The adjusted operating margin was 27.7%, down from 35.1% a year ago.
AUM Balance Increases
As of Jun 30, 2023, AUM was $1.54 trillion, which increased 10.6% year over year. Average AUM at the second-quarter end totaled $1.49 trillion, up 2.6%. Our estimates for total AUM and average AUM were $1.52 trillion and $1.49 trillion, respectively.
The company witnessed long-term net outflows of $2 billion in the quarter.
Balance Sheet Strong
As of Jun 30, 2023, cash and cash equivalents were $1 billion compared with $889 million as of Mar 31, 2023.
Long-term debt was $1.49 billion. The credit facility balance was nil as of Jun 30, 2023.
Our View
Invesco is well-poised to benefit from its global footprint, product offerings and strategic buyouts. However, elevated expenses, a challenging market environment and high debt levels are major near-term concerns.
Performance & Earnings Release Date of Other Asset Managers
BlackRock, Inc.’s (BLK - Free Report) second-quarter 2023 adjusted earnings of $9.28 per share handily surpassed the Zacks Consensus Estimate of $8.47. However, the figure reflects an increase of 26% from the year-ago quarter.
BLK’s results benefited from a decline in expenses and higher non-operating income. Further, the assets under management balance witnessed improvement. However, lower revenues acted as a headwind for BLK.
Ameriprise Financial (AMP - Free Report) is slated to report second-quarter 2023 results on Jul 26.
Over the past 30 days, the Zacks Consensus Estimate for AMP’s quarterly earnings has moved 1.2% lower to $7.29. The figure indicates a 25.5% rise from the prior-year quarter’s actual.
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Invesco (IVZ) Q2 Earnings Miss Estimates, Revenues Decline Y/Y
Invesco’s (IVZ - Free Report) second-quarter 2023 adjusted earnings of 31 cents per share lagged the Zacks Consensus Estimate of 40 cents. The bottom line plunged 20.5% from the prior-year quarter.
Results have been hurt by a rise in operating expenses and lower revenues. Nevertheless, an increase in the assets under management (AUM) balance has aided the results to some extent.
On a GAAP basis, net income attributable to common shareholders was $132.2 million or 29 cents per share, up from $121 million or 26 cents per share a year ago. Our estimate for net income was $100.1 million.
Revenues Decline, Expenses Rise
Adjusted quarterly net revenues were $1.09 billion, falling 7.1% year over year. The top line missed the Zacks Consensus Estimate of $1.10 billion.
Adjusted operating expenses were $788.7 million, up 3.5% year over year. We expected the metric to be $765.9 million.
The adjusted operating margin was 27.7%, down from 35.1% a year ago.
AUM Balance Increases
As of Jun 30, 2023, AUM was $1.54 trillion, which increased 10.6% year over year. Average AUM at the second-quarter end totaled $1.49 trillion, up 2.6%. Our estimates for total AUM and average AUM were $1.52 trillion and $1.49 trillion, respectively.
The company witnessed long-term net outflows of $2 billion in the quarter.
Balance Sheet Strong
As of Jun 30, 2023, cash and cash equivalents were $1 billion compared with $889 million as of Mar 31, 2023.
Long-term debt was $1.49 billion. The credit facility balance was nil as of Jun 30, 2023.
Our View
Invesco is well-poised to benefit from its global footprint, product offerings and strategic buyouts. However, elevated expenses, a challenging market environment and high debt levels are major near-term concerns.
Invesco Ltd. Price, Consensus and EPS Surprise
Invesco Ltd. price-consensus-eps-surprise-chart | Invesco Ltd. Quote
Currently, IVZ 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) second-quarter 2023 adjusted earnings of $9.28 per share handily surpassed the Zacks Consensus Estimate of $8.47. However, the figure reflects an increase of 26% from the year-ago quarter.
BLK’s results benefited from a decline in expenses and higher non-operating income. Further, the assets under management balance witnessed improvement. However, lower revenues acted as a headwind for BLK.
Ameriprise Financial (AMP - Free Report) is slated to report second-quarter 2023 results on Jul 26.
Over the past 30 days, the Zacks Consensus Estimate for AMP’s quarterly earnings has moved 1.2% lower to $7.29. The figure indicates a 25.5% rise from the prior-year quarter’s actual.