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Affiliated Managers (AMG) Q2 Earnings Top, Revenues & AUM Down
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Affiliated Managers Group Inc.’s (AMG - Free Report) second-quarter 2023 economic earnings of $4.45 per share handily outpaced the Zacks Consensus Estimate of 4.23. The bottom line also grew 9.6% from the prior-year number.
Results were aided by lower expenses, partially offset by a decline in revenues and assets under management (AUM) balance. Further, the company had a robust liquidity position.
Economic net income was $167.3 million, down 3.5% year over year. Our estimate for this metric was $155.8 million.
Revenues & Expenses Decline, AUM Falls
Total revenues declined 15.2% year over year to $512.5 million. Also, the top line lagged the Zacks Consensus Estimate of $543 million.
Adjusted EBITDA was $214.3 million, down marginally from the year-ago quarter. We projected the metric to be $213.1 million.
Total expenses decreased 6.5% to $374.6 million year over year. Lower compensation and related expenses and selling, general and administrative charges largely led to the fall. We had projected total expenses of $424.5 million. However, the higher-than-expected decline in compensation expenses led the company to post lower total expenses.
As of Jun 30, 2023, total AUM was $673.9 billion, which declined 2.5%. Net client cash outflows in the quarter were $10.5 billion. Our estimate for AUM was $672.3 billion.
Capital & Liquidity Position Decent
As of Jun 30, 2023, Affiliated Managers had $785.5 million in cash and cash equivalents compared with $429.2 million as of Dec 31, 2022. The company had $2.54 billion of debt, relatively stable with the December 2022-end level.
Shareholders’ equity as of Jun 30, 2023, was $3.4 billion compared with $3.23 billion as of Dec 31, 2022.
Share Repurchase Update
During the second quarter, Affiliated Managers completed the execution of its $225 million accelerated share repurchase (ASR) program. The company entered into the ASR program at the end of 2022. Further, it repurchased an additional $44 million worth of shares during the reported quarter.
Our View
Affiliated Managers remains well-positioned for growth on the back of successful partnerships, global distribution capability and 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
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 have benefited from a decline in expenses and higher non-operating income. Further, AUM balance witnessed improvement. However, lower revenues acted as a headwind.
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 AUM balance aided IVZ’s results to some extent.
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Affiliated Managers (AMG) Q2 Earnings Top, Revenues & AUM Down
Affiliated Managers Group Inc.’s (AMG - Free Report) second-quarter 2023 economic earnings of $4.45 per share handily outpaced the Zacks Consensus Estimate of 4.23. The bottom line also grew 9.6% from the prior-year number.
Results were aided by lower expenses, partially offset by a decline in revenues and assets under management (AUM) balance. Further, the company had a robust liquidity position.
Economic net income was $167.3 million, down 3.5% year over year. Our estimate for this metric was $155.8 million.
Revenues & Expenses Decline, AUM Falls
Total revenues declined 15.2% year over year to $512.5 million. Also, the top line lagged the Zacks Consensus Estimate of $543 million.
Adjusted EBITDA was $214.3 million, down marginally from the year-ago quarter. We projected the metric to be $213.1 million.
Total expenses decreased 6.5% to $374.6 million year over year. Lower compensation and related expenses and selling, general and administrative charges largely led to the fall. We had projected total expenses of $424.5 million. However, the higher-than-expected decline in compensation expenses led the company to post lower total expenses.
As of Jun 30, 2023, total AUM was $673.9 billion, which declined 2.5%. Net client cash outflows in the quarter were $10.5 billion. Our estimate for AUM was $672.3 billion.
Capital & Liquidity Position Decent
As of Jun 30, 2023, Affiliated Managers had $785.5 million in cash and cash equivalents compared with $429.2 million as of Dec 31, 2022. The company had $2.54 billion of debt, relatively stable with the December 2022-end level.
Shareholders’ equity as of Jun 30, 2023, was $3.4 billion compared with $3.23 billion as of Dec 31, 2022.
Share Repurchase Update
During the second quarter, Affiliated Managers completed the execution of its $225 million accelerated share repurchase (ASR) program. The company entered into the ASR program at the end of 2022. Further, it repurchased an additional $44 million worth of shares during the reported quarter.
Our View
Affiliated Managers remains well-positioned for growth on the back of successful partnerships, global distribution capability and 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 #2 (Buy). 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) 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 have benefited from a decline in expenses and higher non-operating income. Further, AUM balance witnessed improvement. However, lower revenues acted as a headwind.
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 AUM balance aided IVZ’s results to some extent.