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Lazard Inc.’s (LAZ - Free Report) first-quarter adjusted earnings per share of 66 cents beat the Zacks Consensus Estimate of 58 cents. This company had incurred a loss of 26 cents per share in the year-ago quarter.
Results benefited from increased revenues and assets under management (AUM) balances. However, higher expenses acted as spoilsports.
The company’s shares declined 1% following the release of its first-quarter 2024 results.
Lazard’s net income (GAAP) was $35.8 million against a loss of $22.2 million reported in the prior-year quarter.
Quarterly Revenues Increase
Quarterly operating revenues were $746.6 million, which jumped 41.7% year over year. Also, the top line beat the Zacks Consensus Estimate of $691.2 million.
Expenses Rise
Operating expenses were $710.2 million, up 22.6% year over year. Our estimate was pegged at $680 million.
The ratio of adjusted compensation expenses to operating revenues was 66%, down from the year-earlier quarter’s 75.7%. The ratio of adjusted non-compensation expenses to operating revenues was 18%, down from the year-ago quarter’s 27%.
Quarterly Segmental Performance Improves
Financial Advisory: The segment’s adjusted operating revenues were $446.6 million, which surged 63% from the year-earlier quarter. We had projected the metric to be $324.8 million.
Asset Management: Segmental adjusted operating revenues of $275.9 million increased 4.3% from the prior-year quarter. Our estimate was pinned at $277.7 million.
Corporate: Adjusted operating revenues from this segment were $24 million against a loss of $11.5 million from the year-earlier quarter. Our estimate was pegged at $0.7 million.
AUM Rises
As of Mar 31, 2024, total AUM was $250.4 billion, which increased 7.9% from the prior quarter. Our projection for the metric was pinned at $350 billion.
The quarter witnessed a market appreciation of $14 billion, a foreign exchange depreciation of $3.6 billion and net outflows of $6.6 billion. Our estimate for net outflows was pegged at $1.3 billion.
The average AUM in the reported quarter was $247 billion, up 8.9% year over year. Our estimate was $298 billion.
Balance Sheet Position Weak
azard’s cash and cash equivalents totaled $923.2 million as of Mar 31, 2024, down 4.9% year over year. Stockholders’ equity was $448.5 million, which decreased 7% from the previous-year quarter.
Capital Deployment Update
In the reported quarter, Lazard repurchased 0.6 million shares for $22 million.
As of Mar 31, 2024, the company’s remaining share repurchase authorization was $178 million.
Our Viewpoint
Lazard is focused on growing organically, evident from its strong AUM balance, along with a quarterly increase in revenues in its first-quarter 2024 results. However, operating backdrop and geopolitical concerns, coupled with a lower cash balance and an elevated expense base, are likely to affect its financials in the near term.
BlackRock,Inc.’s (BLK - Free Report) first-quarter 2024 adjusted earnings of $9.81 per share handily surpassed the Zacks Consensus Estimate of $9.42. The figure reflects a jump of 24% from the year-ago quarter.
The results benefited from a rise in revenues and higher non-operating income. Further, AUM balance witnessed an improvement driven by net inflows. However, higher expenses acted as a dampener.
Invesco’s (IVZ - Free Report) first-quarter 2024 adjusted earnings of 33 cents per share lagged the Zacks Consensus Estimate of 40 cents. The bottom line declined 13.2% from the prior-year quarter.
Results were primarily hurt by a decline in adjusted revenues, along with higher adjusted expenses. However, an increase in the AUM balance on decent inflows was positive.
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Lazard (LAZ) Dips 1% Despite Surpassing Q1 Earnings Estimates
Lazard Inc.’s (LAZ - Free Report) first-quarter adjusted earnings per share of 66 cents beat the Zacks Consensus Estimate of 58 cents. This company had incurred a loss of 26 cents per share in the year-ago quarter.
Results benefited from increased revenues and assets under management (AUM) balances. However, higher expenses acted as spoilsports.
The company’s shares declined 1% following the release of its first-quarter 2024 results.
Lazard’s net income (GAAP) was $35.8 million against a loss of $22.2 million reported in the prior-year quarter.
Quarterly Revenues Increase
Quarterly operating revenues were $746.6 million, which jumped 41.7% year over year. Also, the top line beat the Zacks Consensus Estimate of $691.2 million.
Expenses Rise
Operating expenses were $710.2 million, up 22.6% year over year. Our estimate was pegged at $680 million.
The ratio of adjusted compensation expenses to operating revenues was 66%, down from the year-earlier quarter’s 75.7%. The ratio of adjusted non-compensation expenses to operating revenues was 18%, down from the year-ago quarter’s 27%.
Quarterly Segmental Performance Improves
Financial Advisory: The segment’s adjusted operating revenues were $446.6 million, which surged 63% from the year-earlier quarter. We had projected the metric to be $324.8 million.
Asset Management: Segmental adjusted operating revenues of $275.9 million increased 4.3% from the prior-year quarter. Our estimate was pinned at $277.7 million.
Corporate: Adjusted operating revenues from this segment were $24 million against a loss of $11.5 million from the year-earlier quarter. Our estimate was pegged at $0.7 million.
AUM Rises
As of Mar 31, 2024, total AUM was $250.4 billion, which increased 7.9% from the prior quarter. Our projection for the metric was pinned at $350 billion.
The quarter witnessed a market appreciation of $14 billion, a foreign exchange depreciation of $3.6 billion and net outflows of $6.6 billion. Our estimate for net outflows was pegged at $1.3 billion.
The average AUM in the reported quarter was $247 billion, up 8.9% year over year. Our estimate was $298 billion.
Balance Sheet Position Weak
azard’s cash and cash equivalents totaled $923.2 million as of Mar 31, 2024, down 4.9% year over year. Stockholders’ equity was $448.5 million, which decreased 7% from the previous-year quarter.
Capital Deployment Update
In the reported quarter, Lazard repurchased 0.6 million shares for $22 million.
As of Mar 31, 2024, the company’s remaining share repurchase authorization was $178 million.
Our Viewpoint
Lazard is focused on growing organically, evident from its strong AUM balance, along with a quarterly increase in revenues in its first-quarter 2024 results. However, operating backdrop and geopolitical concerns, coupled with a lower cash balance and an elevated expense base, are likely to affect its financials in the near term.
Lazard, Inc. Price, Consensus and EPS Surprise
Lazard, Inc. price-consensus-eps-surprise-chart | Lazard, Inc. Quote
Currently, Lazard 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) first-quarter 2024 adjusted earnings of $9.81 per share handily surpassed the Zacks Consensus Estimate of $9.42. The figure reflects a jump of 24% from the year-ago quarter.
The results benefited from a rise in revenues and higher non-operating income. Further, AUM balance witnessed an improvement driven by net inflows. However, higher expenses acted as a dampener.
Invesco’s (IVZ - Free Report) first-quarter 2024 adjusted earnings of 33 cents per share lagged the Zacks Consensus Estimate of 40 cents. The bottom line declined 13.2% from the prior-year quarter.
Results were primarily hurt by a decline in adjusted revenues, along with higher adjusted expenses. However, an increase in the AUM balance on decent inflows was positive.