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Invesco (IVZ) to Report Q3 Earnings: What's in the Cards?
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Invesco (IVZ - Free Report) is scheduled to announce third-quarter 2023 results on Oct 24, before market open. While its earnings are expected to have witnessed an increase on a year-over-year basis, revenues are likely to have declined.
In the last reported quarter, the company’s adjusted earnings missed the Zacks Consensus Estimate. Results have been hurt by a rise in operating expenses and lower revenues. Nevertheless, an increase in the AUM balance has aided the results to some extent.
Invesco does not have an impressive earnings surprise history. Its earnings surpassed the Zacks Consensus Estimate in two and lagged in two of the trailing four quarters.
The Zacks Consensus Estimate for Invesco’s third-quarter earnings is pegged at 36 cents, which has been revised 5.3% lower over the past 30 days. The figure indicates a rise of 5.9% from the year-ago quarter. Our estimate for earnings is the same as the consensus figure.
The consensus estimate for sales is pegged at $1.10 billion, suggesting a year-over-year fall of 2.3%. Our estimate for revenues is the same as the consensus number.
Other Key Estimates & Factors to Note
Per the monthly metrics data published by Invesco, its preliminary total AUM as of Sep 30, 2023, was $1,487.3 billion, down 3.3% from the Jun 30, 2023 level. In the third quarter, AUM was unfavorably impacted by weak market returns and outflows.
Despite the sequential decline in the AUM balance, the company’s investment management fee is expected to have improved from the previous quarter. The Zacks Consensus Estimate for investment management fee is pegged at $1.1 billion, indicating an increase of 6.7% on a sequential basis. Our estimate for the same is $1.04 billion.
The consensus estimate for performance fees of $11 million indicates a plunge of 43.7% from the prior quarter. Our estimate for the same is $23.6 million.
The consensus estimate for service and distribution fees of $351.4 million indicates a 2.7% rise. The Zacks Consensus Estimate for other revenues is pegged at $55.4 million, suggesting a rise of 16.7%. Our estimate for service and distribution fees and other revenues are $339.5 million and $48.6 million, respectively.
On the cost front, while Invesco’s cost-saving initiatives are likely to have boosted its efficiency, the steady rise in compensation and marketing costs is expected to have had an adverse impact on overall expenses in the to-be-reported quarter.
Management expects to incur roughly $20 million of additional costs related to executive retirement. This is part of the company’s simplification process to position the firm for greater scale and profitability as it grows its revenue base. Further, IVZ expects G&A expenses to be flat to modestly down sequentially. Our estimate for total expenses (GAAP) is $1.21 billion.
What Our Model Predicts
According to our proven model, the chances of Invesco beating the Zacks Consensus Estimate this time are low. This is because it doesn’t have the right combination of the two key ingredients — a positive Earnings ESP and a Zacks Rank #3 (Hold) or better.
You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Earnings ESP: The Earnings ESP for Invesco is -0.85%.
Zacks Rank: The company currently carries a Zacks Rank #3.
Finance Stocks That Warrant a Look
Here are a couple of finance stocks that you may want to consider, as our model shows that these have the right combination of elements to post an earnings beat this time:
The Earnings ESP for Trustmark Corporation (TRMK - Free Report) is +14.08% and it carries a Zacks Rank #3 at present. The company is slated to report third-quarter 2023 results on Oct 24.
Over the past 30 days, the Zacks Consensus Estimate for TRMK’s quarterly earnings has moved 1.5% north to 69 cents per share.
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Invesco (IVZ) to Report Q3 Earnings: What's in the Cards?
Invesco (IVZ - Free Report) is scheduled to announce third-quarter 2023 results on Oct 24, before market open. While its earnings are expected to have witnessed an increase on a year-over-year basis, revenues are likely to have declined.
In the last reported quarter, the company’s adjusted earnings missed the Zacks Consensus Estimate. Results have been hurt by a rise in operating expenses and lower revenues. Nevertheless, an increase in the AUM balance has aided the results to some extent.
Invesco does not have an impressive earnings surprise history. Its earnings surpassed the Zacks Consensus Estimate in two and lagged in two of the trailing four quarters.
Invesco Ltd. Price and EPS Surprise
Invesco Ltd. price-eps-surprise | Invesco Ltd. Quote
The Zacks Consensus Estimate for Invesco’s third-quarter earnings is pegged at 36 cents, which has been revised 5.3% lower over the past 30 days. The figure indicates a rise of 5.9% from the year-ago quarter. Our estimate for earnings is the same as the consensus figure.
The consensus estimate for sales is pegged at $1.10 billion, suggesting a year-over-year fall of 2.3%. Our estimate for revenues is the same as the consensus number.
Other Key Estimates & Factors to Note
Per the monthly metrics data published by Invesco, its preliminary total AUM as of Sep 30, 2023, was $1,487.3 billion, down 3.3% from the Jun 30, 2023 level. In the third quarter, AUM was unfavorably impacted by weak market returns and outflows.
Despite the sequential decline in the AUM balance, the company’s investment management fee is expected to have improved from the previous quarter. The Zacks Consensus Estimate for investment management fee is pegged at $1.1 billion, indicating an increase of 6.7% on a sequential basis. Our estimate for the same is $1.04 billion.
The consensus estimate for performance fees of $11 million indicates a plunge of 43.7% from the prior quarter. Our estimate for the same is $23.6 million.
The consensus estimate for service and distribution fees of $351.4 million indicates a 2.7% rise. The Zacks Consensus Estimate for other revenues is pegged at $55.4 million, suggesting a rise of 16.7%. Our estimate for service and distribution fees and other revenues are $339.5 million and $48.6 million, respectively.
On the cost front, while Invesco’s cost-saving initiatives are likely to have boosted its efficiency, the steady rise in compensation and marketing costs is expected to have had an adverse impact on overall expenses in the to-be-reported quarter.
Management expects to incur roughly $20 million of additional costs related to executive retirement. This is part of the company’s simplification process to position the firm for greater scale and profitability as it grows its revenue base. Further, IVZ expects G&A expenses to be flat to modestly down sequentially. Our estimate for total expenses (GAAP) is $1.21 billion.
What Our Model Predicts
According to our proven model, the chances of Invesco beating the Zacks Consensus Estimate this time are low. This is because it doesn’t have the right combination of the two key ingredients — a positive Earnings ESP and a Zacks Rank #3 (Hold) or better.
You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Earnings ESP: The Earnings ESP for Invesco is -0.85%.
Zacks Rank: The company currently carries a Zacks Rank #3.
Finance Stocks That Warrant a Look
Here are a couple of finance stocks that you may want to consider, as our model shows that these have the right combination of elements to post an earnings beat this time:
The Earnings ESP for Trustmark Corporation (TRMK - Free Report) is +14.08% and it carries a Zacks Rank #3 at present. The company is slated to report third-quarter 2023 results on Oct 24.
Over the past 30 days, the Zacks Consensus Estimate for TRMK’s quarterly earnings has moved 1.5% north to 69 cents per share.
Pacific Premier Bancorp, Inc. (PPBI - Free Report) is also scheduled to release quarterly numbers on Oct 24. The company, which carries a Zacks Rank #3 at present, has an Earnings ESP of +4.98%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
PPBI’s quarterly earnings estimates have remained unchanged over the past month.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.