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SEI Investments (SEIC) Q3 Earnings Meet, Expenses Dip Y/Y
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SEI Investments Co.’s (SEIC - Free Report) third-quarter 2023 earnings of 87 cents per share met the Zacks Consensus Estimate. The bottom line reflects a rise of 93% from the prior-year quarter.
Results benefited from higher revenues and an increase in the assets under management (AUM) balance. Lower expenses acted as another tailwind.
Net income was $115.7 million, up 88% from the year-ago quarter. Our estimate for the metric was $116 million.
Revenues & AUM Rise, Expenses Decline
Total revenues were $476.8 million, up 1% year over year. The rise was driven by higher asset management, administration and distribution fees. However, the top line missed the Zacks Consensus Estimate of $482.2 million.
Total expenses were $368.3 million, declining 12% year over year. The fall was due to lower compensation, benefits and other personnel costs; stock-based compensation costs; consulting, outsourcing and professional fees; facilities, supplies and other costs; and amortization costs. Our estimate for expenses was $367.3 million.
Operating income increased significantly year over year to $108.5 million. Our estimate for the metric was $111.5 million.
As of Sep 30, 2023, AUM was $406.4 billion, reflecting a year-over-year rise of 7%. Our estimate for AUM was $421.5 billion.
Client assets under administration (AUA) were $890.8 billion, up 13% year over year. Our estimate for the metric was $873.4 billion. Client AUA did not include $11.4 billion related to Funds of Funds assets reported on Sep 30, 2023.
Share Repurchase Update
In the reported quarter, SEI Investments bought back 1.4 million shares for $86 million.
Conclusion
Elevated expenses are expected to hurt the company’s bottom line to an extent in the near term. SEIC’s increased exposure to fee-based revenues is another major concern. However, its robust AUM balance, global presence and diverse range of product offerings are expected to continue driving growth.
SEI Investments Company Price, Consensus and EPS Surprise
BlackRock, Inc.’s (BLK - Free Report) third-quarter 2023 adjusted earnings of $10.91 per share handily surpassed the Zacks Consensus Estimate of $8.52. Also, the figure reflects an increase of 14.2% from the year-ago quarter.
BLK’s results benefited from a rise in revenues and higher non-operating income. Further, the AUM balance witnessed improvement. However, higher expenses acted as a headwind for BLK.
Invesco’s (IVZ - Free Report) third-quarter 2023 adjusted earnings of 35 cents per share lagged the Zacks Consensus Estimate of 36 cents. The bottom line, however, rose 2.9% from the prior-year quarter.
IVZ’s results were hurt by a rise in operating expenses and lower revenues. Nevertheless, an increase in the AUM balance on decent inflows aided the results to some extent.
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SEI Investments (SEIC) Q3 Earnings Meet, Expenses Dip Y/Y
SEI Investments Co.’s (SEIC - Free Report) third-quarter 2023 earnings of 87 cents per share met the Zacks Consensus Estimate. The bottom line reflects a rise of 93% from the prior-year quarter.
Results benefited from higher revenues and an increase in the assets under management (AUM) balance. Lower expenses acted as another tailwind.
Net income was $115.7 million, up 88% from the year-ago quarter. Our estimate for the metric was $116 million.
Revenues & AUM Rise, Expenses Decline
Total revenues were $476.8 million, up 1% year over year. The rise was driven by higher asset management, administration and distribution fees. However, the top line missed the Zacks Consensus Estimate of $482.2 million.
Total expenses were $368.3 million, declining 12% year over year. The fall was due to lower compensation, benefits and other personnel costs; stock-based compensation costs; consulting, outsourcing and professional fees; facilities, supplies and other costs; and amortization costs. Our estimate for expenses was $367.3 million.
Operating income increased significantly year over year to $108.5 million. Our estimate for the metric was $111.5 million.
As of Sep 30, 2023, AUM was $406.4 billion, reflecting a year-over-year rise of 7%. Our estimate for AUM was $421.5 billion.
Client assets under administration (AUA) were $890.8 billion, up 13% year over year. Our estimate for the metric was $873.4 billion. Client AUA did not include $11.4 billion related to Funds of Funds assets reported on Sep 30, 2023.
Share Repurchase Update
In the reported quarter, SEI Investments bought back 1.4 million shares for $86 million.
Conclusion
Elevated expenses are expected to hurt the company’s bottom line to an extent in the near term. SEIC’s increased exposure to fee-based revenues is another major concern. However, its robust AUM balance, global presence and diverse range of product offerings are expected to continue driving growth.
SEI Investments Company Price, Consensus and EPS Surprise
SEI Investments Company price-consensus-eps-surprise-chart | SEI Investments Company Quote
Currently, SEI Investments carries a Zacks Rank #5 (Strong Sell).
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) third-quarter 2023 adjusted earnings of $10.91 per share handily surpassed the Zacks Consensus Estimate of $8.52. Also, the figure reflects an increase of 14.2% from the year-ago quarter.
BLK’s results benefited from a rise in revenues and higher non-operating income. Further, the AUM balance witnessed improvement. However, higher expenses acted as a headwind for BLK.
Invesco’s (IVZ - Free Report) third-quarter 2023 adjusted earnings of 35 cents per share lagged the Zacks Consensus Estimate of 36 cents. The bottom line, however, rose 2.9% from the prior-year quarter.
IVZ’s results were hurt by a rise in operating expenses and lower revenues. Nevertheless, an increase in the AUM balance on decent inflows aided the results to some extent.