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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 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.


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