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Evercore (EVR) Q4 Earnings & Revenues Beat Estimates, Cost Up
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Evercore Inc.’s (EVR - Free Report) quarterly adjusted earnings per share of $2.02 surpassed the Zacks Consensus Estimate of $1.63. However, the bottom line was down from the prior-year quarter’s $3.50.
A decline in net revenues of the Investment Banking & Equities segment hampered the overall top line. Nonetheless, an improvement in assets under management (AUM) balance was a positive. A rise in Investment Management segment revenues also offered some support.
Net income available to common shareholders (GAAP basis) was $82.7 million, down from $140.4 million in the year-ago quarter.
In 2023, adjusted earnings of $6.46 per share beat the Zacks Consensus Estimate of $6.07 but decreased from $12.01 a year ago. Net income available to common shareholders (GAAP basis) of $255.5 million or $6.37 per share fell from $476.5 million or $11.61 per share in 2022.
Revenues Decline & Expenses Rise
In fourth-quarter 2023, net revenues of $784.2 million surpassed the Zacks Consensus Estimate of $700.4 million. However, the top line decreased 5.7% year over year. A decline in advisory and underwriting fees mainly led to the fall.
On an adjusted basis, net revenues came in at $790.3 million, down 5.5%.
In 2023, net revenues plunged 12.2% to $2.43 billion. Nonetheless, the top line outpaced the Zacks Consensus Estimate of $2.36 billion. On an adjusted basis, net revenues were $2.45 billion, down 12.1%.
Total expenses increased 7.3% to $666.5 million. This was mainly due to a rise in almost all the components of total expenses, except depreciation and amortization costs as well as special charges, including business realignment costs.
Adjusted compensation ratio was 70.8%, up from the prior-year quarter’s 62.5%.
Adjusted operating margin was 15.7%, down from the prior-year quarter’s 26.1%.
Quarterly Segmental Performance (GAAP Basis)
Investment Banking & Equities: Net revenues declined 6.1% year over year to $766.2 million. Also, operating income decreased 46.1% to $112.3 million.
Investment Management: Net revenues were $17.9 million, up 17.3% from the prior-year quarter’s reading. Operating income was $5.3 million, up significantly from $1.8 million in the the year-ago quarter. AUM was $12.27 billion as of Dec 31, 2023, up 16% year over year.
Balance Sheet Position
As of Dec 31, 2023, cash and cash equivalents were $596.9 million, and investment securities and certificates of deposit were $1.4 billion. Moreover, current assets exceeded current liabilities by $1.7 billion as of the same date.
Capital Distributions
The company declared quarterly dividend of 76 cents per share. The dividend will be paid on Mar 8, 2024, to common stockholders of record on Feb 23.
Our Viewpoint
The company’s financial performance in the fourth quarter seems disappointing as revenues declined. Nonetheless, amid a challenging macroeconomic backdrop for deal-making, EVR’s initiatives to boost its client base in advisory solutions and expand geographically are impressive strategic moves.
Also, with strong liquidity, the company’s efforts to enhance shareholders’ value through steady capital distribution activities seem sustainable.
Interactive Brokers Group’s (IBKR - Free Report) fourth-quarter 2023 adjusted earnings per share of $1.52 missed the Zacks Consensus Estimate of $1.54. However, the bottom line reflected a rise of 16.9% year over year.
Results were primarily hurt by an increase in expenses. However, higher revenues supported results to some extent. Also, IBKR recorded an increase in customer accounts during the quarter, which, along with a rise in daily average revenue trades, was a tailwind.
Raymond James’ (RJF - Free Report) first-quarter fiscal 2024 (ended Dec 31, 2023) adjusted earnings of $2.40 per share surpassed the Zacks Consensus Estimate of $2.25. The bottom line was up 5% year over year.
Robust investment banking and brokerage performances aided the Capital Markets segment’s results. The performances of the Private Client Group and the Asset Management segments were also decent. The acquisitions over the past years supported RJF’s financials to some extent.
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Evercore (EVR) Q4 Earnings & Revenues Beat Estimates, Cost Up
Evercore Inc.’s (EVR - Free Report) quarterly adjusted earnings per share of $2.02 surpassed the Zacks Consensus Estimate of $1.63. However, the bottom line was down from the prior-year quarter’s $3.50.
A decline in net revenues of the Investment Banking & Equities segment hampered the overall top line. Nonetheless, an improvement in assets under management (AUM) balance was a positive. A rise in Investment Management segment revenues also offered some support.
Net income available to common shareholders (GAAP basis) was $82.7 million, down from $140.4 million in the year-ago quarter.
In 2023, adjusted earnings of $6.46 per share beat the Zacks Consensus Estimate of $6.07 but decreased from $12.01 a year ago. Net income available to common shareholders (GAAP basis) of $255.5 million or $6.37 per share fell from $476.5 million or $11.61 per share in 2022.
Revenues Decline & Expenses Rise
In fourth-quarter 2023, net revenues of $784.2 million surpassed the Zacks Consensus Estimate of $700.4 million. However, the top line decreased 5.7% year over year. A decline in advisory and underwriting fees mainly led to the fall.
On an adjusted basis, net revenues came in at $790.3 million, down 5.5%.
In 2023, net revenues plunged 12.2% to $2.43 billion. Nonetheless, the top line outpaced the Zacks Consensus Estimate of $2.36 billion. On an adjusted basis, net revenues were $2.45 billion, down 12.1%.
Total expenses increased 7.3% to $666.5 million. This was mainly due to a rise in almost all the components of total expenses, except depreciation and amortization costs as well as special charges, including business realignment costs.
Adjusted compensation ratio was 70.8%, up from the prior-year quarter’s 62.5%.
Adjusted operating margin was 15.7%, down from the prior-year quarter’s 26.1%.
Quarterly Segmental Performance (GAAP Basis)
Investment Banking & Equities: Net revenues declined 6.1% year over year to $766.2 million. Also, operating income decreased 46.1% to $112.3 million.
Investment Management: Net revenues were $17.9 million, up 17.3% from the prior-year quarter’s reading. Operating income was $5.3 million, up significantly from $1.8 million in the the year-ago quarter. AUM was $12.27 billion as of Dec 31, 2023, up 16% year over year.
Balance Sheet Position
As of Dec 31, 2023, cash and cash equivalents were $596.9 million, and investment securities and certificates of deposit were $1.4 billion. Moreover, current assets exceeded current liabilities by $1.7 billion as of the same date.
Capital Distributions
The company declared quarterly dividend of 76 cents per share. The dividend will be paid on Mar 8, 2024, to common stockholders of record on Feb 23.
Our Viewpoint
The company’s financial performance in the fourth quarter seems disappointing as revenues declined. Nonetheless, amid a challenging macroeconomic backdrop for deal-making, EVR’s initiatives to boost its client base in advisory solutions and expand geographically are impressive strategic moves.
Also, with strong liquidity, the company’s efforts to enhance shareholders’ value through steady capital distribution activities seem sustainable.
Evercore Inc Price, Consensus and EPS Surprise
Evercore Inc price-consensus-eps-surprise-chart | Evercore Inc Quote
Currently, Evercore has a Zacks Rank #4 (Sell).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Peer Performance
Interactive Brokers Group’s (IBKR - Free Report) fourth-quarter 2023 adjusted earnings per share of $1.52 missed the Zacks Consensus Estimate of $1.54. However, the bottom line reflected a rise of 16.9% year over year.
Results were primarily hurt by an increase in expenses. However, higher revenues supported results to some extent. Also, IBKR recorded an increase in customer accounts during the quarter, which, along with a rise in daily average revenue trades, was a tailwind.
Raymond James’ (RJF - Free Report) first-quarter fiscal 2024 (ended Dec 31, 2023) adjusted earnings of $2.40 per share surpassed the Zacks Consensus Estimate of $2.25. The bottom line was up 5% year over year.
Robust investment banking and brokerage performances aided the Capital Markets segment’s results. The performances of the Private Client Group and the Asset Management segments were also decent. The acquisitions over the past years supported RJF’s financials to some extent.