We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Federated Hermes (FHI) Q4 Earnings Top Estimates, Costs Fall
Read MoreHide Full Article
Federated Hermes, Inc.’s (FHI - Free Report) fourth-quarter 2023 earnings per share of 96 cents outpaced the Zacks Consensus Estimate of 84 cents. The bottom line jumped 52.4% from the year-ago quarter.
An increase in net investment advisory fees and net administrative service fees are the major driving factors. Moreover, reduced expense levels were tailwinds.
Net income was $82.2 million, up 45.5% from the year-ago quarter.
Earnings per share of $3.40 for 2023 surpassed the Zacks Consensus Estimate of $3.28. Last year, the company reported earnings per share of $2.65. Net income was $299 million, up 24.8% from the year-ago period.
Revenues Improve, Operating Expenses Decline
Total revenues improved 4.7% year over year to $391.5 million. The top line missed the Zacks Consensus Estimate of $396.4 million. The rise was driven by an increase in net investment advisory fees and net administrative service fees.
Revenues for 2023 improved 11.3% year over year to $1.61 billion. The top line was in line with the Zacks Consensus Estimate.
Quarterly net investment advisory fees grew 3% to $264.7 million. While net other service fees decreased 13% to $35.9 million, net administrative service fees jumped 19.9% to $90.9 million.
In the reported quarter, Federated Hermes derived 50% of its total revenues from money market assets, 29% from equity, 12% from fixed-income assets, 8% from alternative/private markets and multi-asset, and the remaining 1% from sources other than managed assets.
Total operating expenses declined 6.8% year over year to $288.9 million. Our expectation for the metric was $301.6 million.
Federated Hermes recorded net non-operating income of $14.7 million compared with $11.4 million in the prior-year quarter.
As of Dec 31, 2023, cash and other investments, and total long-term debt were $560.7 million and $347.8 million compared with $521.8 million and $347.6 million, respectively, as of Dec 31, 2022.
Asset Position Increase
As of Dec 31, 2023, total managed assets were $757.6 billion, up 13% year over year. FHI witnessed money-market assets of $560 billion, up 17% year over year. Fixed-income assets increased 9.4% to $94.9 billion.
Equity assets of $79.3 billion declined 2.7% from the prior-year quarter. Moreover, alternative/private market assets decreased 1.2% to $20.6 billion. Our expectations for money-market assets, fixed-income assets, equity assets and alternative/private market assets were $499.2 billion, $87.1 billion, $80.6 billion and $20.8 billion, respectively.
Average managed assets totaled $728 billion, up 15% year over year.
Capital Distribution Update
The company declared quarterly cash dividend of 28 cents per share, which will be paid on Feb 15, 2024, to shareholders of record as of Feb 8.
The company repurchased 1,902,861 shares of its class B common stock for $61 million in the reported quarter.
Our Viewpoint
Federated Hermes displays substantial growth potential, supported by its diverse asset and product mix, and a solid liquidity position. Though uncertain markets pose concerns, a solid asset under management balance will likely aid its financials.
Federated Hermes, Inc. Price, Consensus and EPS Surprise
T. Rowe Price Group, Inc. (TROW - Free Report) is slated to announce fourth-quarter and full-year 2023 numbers on Feb 8.
Over the past week, the Zacks Consensus Estimate for TROW’s quarterly earnings has increased 1.3% to $1.60 per share. This implies an 8.1% decline from the prior-year reported number.
Franklin Resources, Inc. (BEN - Free Report) is slated to announce first-quarter fiscal 2024 numbers on Jan 29 .
Over the past week, the Zacks Consensus Estimate for BEN’s quarterly earnings has increased 1.8% to 57 cents. This implies an 11.8% rise from the prior-year reported number.
Unique Zacks Analysis of Your Chosen Ticker
Pick one free report - opportunity may be withdrawn at any time
Image: Bigstock
Federated Hermes (FHI) Q4 Earnings Top Estimates, Costs Fall
Federated Hermes, Inc.’s (FHI - Free Report) fourth-quarter 2023 earnings per share of 96 cents outpaced the Zacks Consensus Estimate of 84 cents. The bottom line jumped 52.4% from the year-ago quarter.
An increase in net investment advisory fees and net administrative service fees are the major driving factors. Moreover, reduced expense levels were tailwinds.
Net income was $82.2 million, up 45.5% from the year-ago quarter.
Earnings per share of $3.40 for 2023 surpassed the Zacks Consensus Estimate of $3.28. Last year, the company reported earnings per share of $2.65. Net income was $299 million, up 24.8% from the year-ago period.
Revenues Improve, Operating Expenses Decline
Total revenues improved 4.7% year over year to $391.5 million. The top line missed the Zacks Consensus Estimate of $396.4 million. The rise was driven by an increase in net investment advisory fees and net administrative service fees.
Revenues for 2023 improved 11.3% year over year to $1.61 billion. The top line was in line with the Zacks Consensus Estimate.
Quarterly net investment advisory fees grew 3% to $264.7 million. While net other service fees decreased 13% to $35.9 million, net administrative service fees jumped 19.9% to $90.9 million.
In the reported quarter, Federated Hermes derived 50% of its total revenues from money market assets, 29% from equity, 12% from fixed-income assets, 8% from alternative/private markets and multi-asset, and the remaining 1% from sources other than managed assets.
Total operating expenses declined 6.8% year over year to $288.9 million. Our expectation for the metric was $301.6 million.
Federated Hermes recorded net non-operating income of $14.7 million compared with $11.4 million in the prior-year quarter.
As of Dec 31, 2023, cash and other investments, and total long-term debt were $560.7 million and $347.8 million compared with $521.8 million and $347.6 million, respectively, as of Dec 31, 2022.
Asset Position Increase
As of Dec 31, 2023, total managed assets were $757.6 billion, up 13% year over year. FHI witnessed money-market assets of $560 billion, up 17% year over year. Fixed-income assets increased 9.4% to $94.9 billion.
Equity assets of $79.3 billion declined 2.7% from the prior-year quarter. Moreover, alternative/private market assets decreased 1.2% to $20.6 billion. Our expectations for money-market assets, fixed-income assets, equity assets and alternative/private market assets were $499.2 billion, $87.1 billion, $80.6 billion and $20.8 billion, respectively.
Average managed assets totaled $728 billion, up 15% year over year.
Capital Distribution Update
The company declared quarterly cash dividend of 28 cents per share, which will be paid on Feb 15, 2024, to shareholders of record as of Feb 8.
The company repurchased 1,902,861 shares of its class B common stock for $61 million in the reported quarter.
Our Viewpoint
Federated Hermes displays substantial growth potential, supported by its diverse asset and product mix, and a solid liquidity position. Though uncertain markets pose concerns, a solid asset under management balance will likely aid its financials.
Federated Hermes, Inc. Price, Consensus and EPS Surprise
Federated Hermes, Inc. price-consensus-eps-surprise-chart | Federated Hermes, Inc. Quote
Currently, the company carries a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.
Earnings Release Dates of Other Asset Managers
T. Rowe Price Group, Inc. (TROW - Free Report) is slated to announce fourth-quarter and full-year 2023 numbers on Feb 8.
Over the past week, the Zacks Consensus Estimate for TROW’s quarterly earnings has increased 1.3% to $1.60 per share. This implies an 8.1% decline from the prior-year reported number.
Franklin Resources, Inc. (BEN - Free Report) is slated to announce first-quarter fiscal 2024 numbers on Jan 29 .
Over the past week, the Zacks Consensus Estimate for BEN’s quarterly earnings has increased 1.8% to 57 cents. This implies an 11.8% rise from the prior-year reported number.