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Invesco's (IVZ) Stock Slides Despite Q4 Earnings Beat, AUM Up
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Invesco’s (IVZ - Free Report) fourth-quarter 2023 adjusted earnings of 47 cents per share handily surpassed the Zacks Consensus Estimate of 38 cents. The bottom line grew 20.5% from the prior-year quarter.
Shares of Invesco lost 3.1% in pre-market trading on persistent top-line weakness.
Results benefited from an increase in assets under management (AUM) balance on decent inflows. However, a rise in operating expenses and lower revenues were the undermining factors.
On a GAAP basis, net loss attributable to common shareholders was $742.3 million or $1.64 per share, against net income of $187.8 million or 41 cents per share a year ago. Our estimate for the metric was $119 million and did not include non-cash intangible asset impairment charge of $1.2 billion.
For 2023, adjusted earnings per share of $1.51 beat the consensus estimate of $1.43 but declined 10.1% year over year. Net loss attributable to common shareholders (GAAP) was $333.7 million or 73 cents per share against net income of $683.9 million or $1.49 per share a year ago.
Revenues Decline, Expenses Rise
Adjusted quarterly net revenues were $1.05 billion, falling 5.6% year over year. The top line lagged the Zacks Consensus Estimate of $1.11 billion.
For 2023, net revenues were $4.31 billion, falling 7.2% year over year. The top line missed the Zacks Consensus Estimate of $4.37 billion.
Adjusted operating expenses were $770.5 million, up marginally on a year-over-year basis. We expected the metric to be $749.9 million.
During the reported quarter, the company incurred $22 million in organizational change expenses. These efforts are expected to generate $50 million in cost savings in 2024. The company has already realized $44 million in annualized net savings till 2023-end, and the remaining $6 million in annualized net savings is projected to be achieved in the first quarter of 2024.
The adjusted operating margin was 26.3%, down from 30.6% a year ago.
AUM Balance Increases
As of Dec 31, 2023, AUM was $1.59 trillion, which increased 12.5% year over year. Average AUM at the fourth-quarter end totaled $1.52 trillion, up 8.9%.
The company witnessed long-term net inflows of $6.7 billion in the reported quarter.
Balance Sheet Strong
As of Dec 31, 2023, cash and cash equivalents were $1.47 billion compared with $1.24 billion as of Sep 30, 2023.
Long-term debt was $1.49 billion. The credit facility balance was nil as of Dec 31, 2023.
Our View
Invesco is well-poised to benefit from its global footprint, product offerings and strategic buyouts. However, elevated expenses, a challenging market environment and high debt levels are major near-term concerns.
Performance & Earnings Release Date of Other Asset Managers
BlackRock, Inc.’s (BLK - Free Report) fourth-quarter 2023 adjusted earnings of $9.66 per share handily surpassed the Zacks Consensus Estimate of $8.84. The figure reflects an increase of 8.2% from the year-ago quarter.
BLK’s quarterly results benefited from a rise in revenues and higher non-operating income. Further, AUM balance witnessed an improvement owing to net inflows. However, higher expenses acted as a dampener.
Ameriprise Financial (AMP - Free Report) is slated to report fourth-quarter and full-year 2023 results on Jan 24.
Over the past 30 days, the Zacks Consensus Estimate for AMP’s quarterly earnings has moved marginally lower to $7.67. The figure indicates a 10.5% rise from the prior-year quarter.
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Invesco's (IVZ) Stock Slides Despite Q4 Earnings Beat, AUM Up
Invesco’s (IVZ - Free Report) fourth-quarter 2023 adjusted earnings of 47 cents per share handily surpassed the Zacks Consensus Estimate of 38 cents. The bottom line grew 20.5% from the prior-year quarter.
Shares of Invesco lost 3.1% in pre-market trading on persistent top-line weakness.
Results benefited from an increase in assets under management (AUM) balance on decent inflows. However, a rise in operating expenses and lower revenues were the undermining factors.
On a GAAP basis, net loss attributable to common shareholders was $742.3 million or $1.64 per share, against net income of $187.8 million or 41 cents per share a year ago. Our estimate for the metric was $119 million and did not include non-cash intangible asset impairment charge of $1.2 billion.
For 2023, adjusted earnings per share of $1.51 beat the consensus estimate of $1.43 but declined 10.1% year over year. Net loss attributable to common shareholders (GAAP) was $333.7 million or 73 cents per share against net income of $683.9 million or $1.49 per share a year ago.
Revenues Decline, Expenses Rise
Adjusted quarterly net revenues were $1.05 billion, falling 5.6% year over year. The top line lagged the Zacks Consensus Estimate of $1.11 billion.
For 2023, net revenues were $4.31 billion, falling 7.2% year over year. The top line missed the Zacks Consensus Estimate of $4.37 billion.
Adjusted operating expenses were $770.5 million, up marginally on a year-over-year basis. We expected the metric to be $749.9 million.
During the reported quarter, the company incurred $22 million in organizational change expenses. These efforts are expected to generate $50 million in cost savings in 2024. The company has already realized $44 million in annualized net savings till 2023-end, and the remaining $6 million in annualized net savings is projected to be achieved in the first quarter of 2024.
The adjusted operating margin was 26.3%, down from 30.6% a year ago.
AUM Balance Increases
As of Dec 31, 2023, AUM was $1.59 trillion, which increased 12.5% year over year. Average AUM at the fourth-quarter end totaled $1.52 trillion, up 8.9%.
The company witnessed long-term net inflows of $6.7 billion in the reported quarter.
Balance Sheet Strong
As of Dec 31, 2023, cash and cash equivalents were $1.47 billion compared with $1.24 billion as of Sep 30, 2023.
Long-term debt was $1.49 billion. The credit facility balance was nil as of Dec 31, 2023.
Our View
Invesco is well-poised to benefit from its global footprint, product offerings and strategic buyouts. However, elevated expenses, a challenging market environment and high debt levels are major near-term concerns.
Invesco Ltd. Price, Consensus and EPS Surprise
Invesco Ltd. price-consensus-eps-surprise-chart | Invesco Ltd. Quote
Currently, IVZ carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Performance & Earnings Release Date of Other Asset Managers
BlackRock, Inc.’s (BLK - Free Report) fourth-quarter 2023 adjusted earnings of $9.66 per share handily surpassed the Zacks Consensus Estimate of $8.84. The figure reflects an increase of 8.2% from the year-ago quarter.
BLK’s quarterly results benefited from a rise in revenues and higher non-operating income. Further, AUM balance witnessed an improvement owing to net inflows. However, higher expenses acted as a dampener.
Ameriprise Financial (AMP - Free Report) is slated to report fourth-quarter and full-year 2023 results on Jan 24.
Over the past 30 days, the Zacks Consensus Estimate for AMP’s quarterly earnings has moved marginally lower to $7.67. The figure indicates a 10.5% rise from the prior-year quarter.