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Affiliated Managers' (AMG) Q3 Earnings Top, Revenues & AUM Down
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Affiliated Managers Group Inc.’s (AMG - Free Report) third-quarter 2023 economic earnings of $4.08 per share handily outpaced the Zacks Consensus Estimate of $3.78. The bottom line, however, declined 3.5% 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 $149.5 million, down 10.5% year over year. Our estimate for this metric was $140.4 million.
Revenues & Expenses Decline, AUM Falls
Total revenues declined 9.2% year over year to $525.2 million. However, the top line beat the Zacks Consensus Estimate of $514.74 million.
Adjusted EBITDA was $208.4 million, down 5.8% from the year-ago quarter. We projected the metric to be $195.2 million.
Total consolidated expenses decreased 16% to $357.4 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 $407.1 million. However, the higher-than-expected decline in compensation expenses led the company to post lower total costs.
As of Sep 30, 2023, total AUM was $635.8 billion, which declined 1.4%. Net client cash outflows in the quarter were $9.4 billion. Our estimate for AUM was $674.6 billion.
Capital & Liquidity Position Decent
As of Sep 30, 2023, Affiliated Managers had $999.2 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 Sep 30, 2023, was $3.5 billion compared with $3.23 billion as of Dec 31, 2022.
Share Repurchase Update
During the third quarter, Affiliated Managers repurchased shares worth $172 million.
Further, the company increased the share repurchase authorization and provided for buying back 5 million shares under the plan.
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) 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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Affiliated Managers' (AMG) Q3 Earnings Top, Revenues & AUM Down
Affiliated Managers Group Inc.’s (AMG - Free Report) third-quarter 2023 economic earnings of $4.08 per share handily outpaced the Zacks Consensus Estimate of $3.78. The bottom line, however, declined 3.5% 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 $149.5 million, down 10.5% year over year. Our estimate for this metric was $140.4 million.
Revenues & Expenses Decline, AUM Falls
Total revenues declined 9.2% year over year to $525.2 million. However, the top line beat the Zacks Consensus Estimate of $514.74 million.
Adjusted EBITDA was $208.4 million, down 5.8% from the year-ago quarter. We projected the metric to be $195.2 million.
Total consolidated expenses decreased 16% to $357.4 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 $407.1 million. However, the higher-than-expected decline in compensation expenses led the company to post lower total costs.
As of Sep 30, 2023, total AUM was $635.8 billion, which declined 1.4%. Net client cash outflows in the quarter were $9.4 billion. Our estimate for AUM was $674.6 billion.
Capital & Liquidity Position Decent
As of Sep 30, 2023, Affiliated Managers had $999.2 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 Sep 30, 2023, was $3.5 billion compared with $3.23 billion as of Dec 31, 2022.
Share Repurchase Update
During the third quarter, Affiliated Managers repurchased shares worth $172 million.
Further, the company increased the share repurchase authorization and provided for buying back 5 million shares under the plan.
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 #3 (Hold). 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.