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The Carlyle Group Inc.’s (CG - Free Report) shares have slipped 7.2% despite better-than-expected second-quarter 2023 results. CG reported post-tax distributable earnings per share of 88 cents, surpassing the Zacks Consensus Estimate of 65 cents. However, the bottom line declined from $1.17 in the year-ago quarter.
An increase in assets under management (AUM) balance and fee revenues as well as reduced expenses supported the results. However, a decrease in realized performance revenues was a major headwind.
Net loss attributable to common stockholders (GAAP basis) was $98.4 million against an income of $245.4 million in the prior-year quarter.
Revenues & Expenses Fall
Segmental revenues were $977.9 million in the quarter under review, decreasing 15.8% from the year-ago quarter. Nonetheless, the top line surpassed the Zacks Consensus Estimate of $809.1 million.
Total segment fee revenues increased 2.2% year over year to $606.4 million. A rise in fee related performance revenues primarily resulted in the uptick.
Realized performance revenues plunged 35.5% to $335.1 million. Our estimate for the metric was $289.3 million.
Total segmental expenses amounted to $589.1 million, down 6.8% year over year. The decline primarily resulted from decreased realized performance revenues related compensation.
AUM Increases
As of Jun 30, 2023, total AUM was $384.79 billion, up 1% from the prior quarter. We had expected the metric to be $406.08 billion, but substantially lower income from foreign exchange rate fluctuations led the company to post a decreased number.
Fee-earning AUM for the reported quarter was $271.4 billion, up marginally on a sequential basis. We had anticipated the metric to be $289.11 billion but the inflows were worse than our projections, leading CG to post a lower number.
Dividend Update
On Aug 2, Carlyle’s board of directors announced a quarterly cash dividend of 35 cents per share. This will be paid out on Aug 23 to shareholders of record as of Aug 15.
Conclusion
Carlyle’s efforts to scale investment platforms and expand operations in the real-estate credit space are likely to stoke top-line growth. Going ahead, an increase in AUM balance and fund management fees is likely to support its organic growth. However, a challenging operating environment is a near-term headwind.
Carlyle Group Inc. Price, Consensus and EPS Surprise
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 of IVZ were hurt by a rise in operating expenses and lower revenues. Nevertheless, an increase in AUM balance aided the results to some extent.
Franklin Resources Inc. (BEN - Free Report) reported third-quarter fiscal 2023 (ended Jun 30) adjusted earnings of 63 cents per share, which beat the Zacks Consensus Estimate of 60 cents. However, the bottom line dipped 23% from the year-earlier quarter.
While a rise in AUM was a tailwind, BEN’s results displayed top-line weakness in the quarter. Rising expenses affected the bottom line to some extent.
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Carlyle (CG) Falls 7.2% Despite Q2 Earnings & Revenue Beat
The Carlyle Group Inc.’s (CG - Free Report) shares have slipped 7.2% despite better-than-expected second-quarter 2023 results. CG reported post-tax distributable earnings per share of 88 cents, surpassing the Zacks Consensus Estimate of 65 cents. However, the bottom line declined from $1.17 in the year-ago quarter.
An increase in assets under management (AUM) balance and fee revenues as well as reduced expenses supported the results. However, a decrease in realized performance revenues was a major headwind.
Net loss attributable to common stockholders (GAAP basis) was $98.4 million against an income of $245.4 million in the prior-year quarter.
Revenues & Expenses Fall
Segmental revenues were $977.9 million in the quarter under review, decreasing 15.8% from the year-ago quarter. Nonetheless, the top line surpassed the Zacks Consensus Estimate of $809.1 million.
Total segment fee revenues increased 2.2% year over year to $606.4 million. A rise in fee related performance revenues primarily resulted in the uptick.
Realized performance revenues plunged 35.5% to $335.1 million. Our estimate for the metric was $289.3 million.
Total segmental expenses amounted to $589.1 million, down 6.8% year over year. The decline primarily resulted from decreased realized performance revenues related compensation.
AUM Increases
As of Jun 30, 2023, total AUM was $384.79 billion, up 1% from the prior quarter. We had expected the metric to be $406.08 billion, but substantially lower income from foreign exchange rate fluctuations led the company to post a decreased number.
Fee-earning AUM for the reported quarter was $271.4 billion, up marginally on a sequential basis. We had anticipated the metric to be $289.11 billion but the inflows were worse than our projections, leading CG to post a lower number.
Dividend Update
On Aug 2, Carlyle’s board of directors announced a quarterly cash dividend of 35 cents per share. This will be paid out on Aug 23 to shareholders of record as of Aug 15.
Conclusion
Carlyle’s efforts to scale investment platforms and expand operations in the real-estate credit space are likely to stoke top-line growth. Going ahead, an increase in AUM balance and fund management fees is likely to support its organic growth. However, a challenging operating environment is a near-term headwind.
Carlyle Group Inc. Price, Consensus and EPS Surprise
Carlyle Group Inc. price-consensus-eps-surprise-chart | Carlyle Group Inc. Quote
Currently, CG carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Performance of Some Asset Managers
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 of IVZ were hurt by a rise in operating expenses and lower revenues. Nevertheless, an increase in AUM balance aided the results to some extent.
Franklin Resources Inc. (BEN - Free Report) reported third-quarter fiscal 2023 (ended Jun 30) adjusted earnings of 63 cents per share, which beat the Zacks Consensus Estimate of 60 cents. However, the bottom line dipped 23% from the year-earlier quarter.
While a rise in AUM was a tailwind, BEN’s results displayed top-line weakness in the quarter. Rising expenses affected the bottom line to some extent.