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Evercore's (EVR) Q2 Earnings Miss Estimates, Revenues Decline
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Evercore’s (EVR - Free Report) second-quarter 2023 adjusted earnings per share of 96 cents missed the Zacks Consensus Estimate of $1.37. Also, the bottom line was down from the prior-year quarter’s $2.46.
A decline in net revenues of Investment Banking & Equities hampered the overall top line. Nonetheless, lower expenses alleviated the bottom-line pressure. Further, despite a challenging operating environment, EVR saw a rise in assets under management (AUM).
Net income available to common shareholders (GAAP basis) was $37.2 million, down from $95.6 million reported in the year-ago quarter.
Revenues & Expenses Decline
In second-quarter 2023, net revenues of $503.6 million missed the Zacks Consensus Estimate of $524.5 million. Also, the top line decreased 20.7% year over year. A decline in advisory fees as well as commissions and related revenues majorly led to the fall.
Total expenses declined 8.9% to $441.7 million. This was mainly due to lower employee compensation and benefits costs.
Adjusted compensation ratio was 67%, up from the prior-year quarter’s 61%.
Adjusted operating margin was 12.6%, down from the prior-year quarter’s 24%.
Quarterly Segmental Performance (Adjusted)
Investment Banking & Equities: Net revenues declined 21.5% year over year to $486.6 million. Also, operating income decreased 61% to $58.2 million.
Investment Management: Net revenues were $18.6 million, up 4.5% from the prior-year quarter’s reading. Operating income was $5.2 million, up 26.7% from the year-ago quarter. AUM of $11.49 billion as of Jun 30, 2023, was up 9.8% from the year-earlier quarter.
Balance Sheet Position
As of Jun 30, 2023, cash and cash equivalents were $520.6 million, and investment securities and certificates of deposit were $962.1 million. Moreover, current assets exceeded current liabilities by $1.5 billion as of the same date.
Capital Deployment Activities
In second-quarter 2023, Evercore repurchased 2.7 million shares at an average price of $128.01 per share.
Our Viewpoint
The company’s financial performance in the second quarter seems disappointing as revenues declined. Nonetheless, amid unfavorable macroeconomic backdrop for deal-making EVR’s initiatives to boost its client base in advisory solutions and expand geographically are impressive strategic moves.
Also, with strong liquidity, the company’s efforts to enhance shareholders’ value through steady capital deployment activities seem sustainable.
Charles Schwab’s (SCHW - Free Report) second-quarter 2023 adjusted earnings of 75 cents per share beat the Zacks Consensus Estimate of 73 cents. The bottom line, however, declined 25% from the prior-year quarter.
Results of SCHW benefited from solid performance of the asset management business. Also, the absence of fee waivers and solid brokerage account numbers acted as tailwinds during the quarter.
Interactive Brokers Group’s (IBKR - Free Report) second-quarter 2023 adjusted earnings per share of $1.32 missed the Zacks Consensus Estimate of $1.41. However, the bottom line reflects a rise of 57.1% from the prior-year quarter.
Results of IBKR were adversely impacted by an increase in expenses. A fall in daily average revenue trades was another headwind. However, an improvement in revenues aided the stock. Also, the company had a strong capital position.
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Evercore's (EVR) Q2 Earnings Miss Estimates, Revenues Decline
Evercore’s (EVR - Free Report) second-quarter 2023 adjusted earnings per share of 96 cents missed the Zacks Consensus Estimate of $1.37. Also, the bottom line was down from the prior-year quarter’s $2.46.
A decline in net revenues of Investment Banking & Equities hampered the overall top line. Nonetheless, lower expenses alleviated the bottom-line pressure. Further, despite a challenging operating environment, EVR saw a rise in assets under management (AUM).
Net income available to common shareholders (GAAP basis) was $37.2 million, down from $95.6 million reported in the year-ago quarter.
Revenues & Expenses Decline
In second-quarter 2023, net revenues of $503.6 million missed the Zacks Consensus Estimate of $524.5 million. Also, the top line decreased 20.7% year over year. A decline in advisory fees as well as commissions and related revenues majorly led to the fall.
Total expenses declined 8.9% to $441.7 million. This was mainly due to lower employee compensation and benefits costs.
Adjusted compensation ratio was 67%, up from the prior-year quarter’s 61%.
Adjusted operating margin was 12.6%, down from the prior-year quarter’s 24%.
Quarterly Segmental Performance (Adjusted)
Investment Banking & Equities: Net revenues declined 21.5% year over year to $486.6 million. Also, operating income decreased 61% to $58.2 million.
Investment Management: Net revenues were $18.6 million, up 4.5% from the prior-year quarter’s reading. Operating income was $5.2 million, up 26.7% from the year-ago quarter. AUM of $11.49 billion as of Jun 30, 2023, was up 9.8% from the year-earlier quarter.
Balance Sheet Position
As of Jun 30, 2023, cash and cash equivalents were $520.6 million, and investment securities and certificates of deposit were $962.1 million. Moreover, current assets exceeded current liabilities by $1.5 billion as of the same date.
Capital Deployment Activities
In second-quarter 2023, Evercore repurchased 2.7 million shares at an average price of $128.01 per share.
Our Viewpoint
The company’s financial performance in the second quarter seems disappointing as revenues declined. Nonetheless, amid unfavorable macroeconomic backdrop for deal-making EVR’s initiatives to boost its client base in advisory solutions and expand geographically are impressive strategic moves.
Also, with strong liquidity, the company’s efforts to enhance shareholders’ value through steady capital deployment activities seem sustainable.
Evercore Inc Price, Consensus and EPS Surprise
Evercore Inc price-consensus-eps-surprise-chart | Evercore Inc Quote
Currently, Evercore has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Peer Performance
Charles Schwab’s (SCHW - Free Report) second-quarter 2023 adjusted earnings of 75 cents per share beat the Zacks Consensus Estimate of 73 cents. The bottom line, however, declined 25% from the prior-year quarter.
Results of SCHW benefited from solid performance of the asset management business. Also, the absence of fee waivers and solid brokerage account numbers acted as tailwinds during the quarter.
Interactive Brokers Group’s (IBKR - Free Report) second-quarter 2023 adjusted earnings per share of $1.32 missed the Zacks Consensus Estimate of $1.41. However, the bottom line reflects a rise of 57.1% from the prior-year quarter.
Results of IBKR were adversely impacted by an increase in expenses. A fall in daily average revenue trades was another headwind. However, an improvement in revenues aided the stock. Also, the company had a strong capital position.