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SEI Investments (SEIC) Q2 Earnings & Revenues Beat, AUM Up

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SEI Investments Co. (SEIC - Free Report) reported second-quarter 2017 earnings of 57 cents per share, surpassing the Zacks Consensus Estimate of 55 cents. Also, bottom line improved 16.3% from the prior-year quarter.

Results benefitted from an increase in total revenues, partly offset by higher operating expenses. Improvement in assets under management (AUM) also acted as a tailwind.

Net income for the quarter came in at $91.8 million, increasing 13.3% from the year-ago period.

Revenues and AUM Rise, Expenses Jump

Total revenue grew 8.3% year over year to $372.3 million. The rise mainly reflected an increase in asset management, administration and distribution fees, as well as higher information processing and software servicing fees. Further, the figure surpassed the Zacks Consensus Estimate of $370.5 million.

Total expenses were $275.1 million, increasing 9.9% year over year. All cost components other than brokerage commissions recorded an upside.

Operating income rose 4% year over year to $97.2 million.

As of Jun 30, 2017, AUM was $307.4 billion, up 14.2% year over year. Total client AUM was $497.5 billion, increasing 13.7% year over year. Note that client AUM does not include $9.8 billion related to Funds of Funds assets that were reported on Jun 30, 2017.

Share Repurchase

In the reported quarter, SEI Investments bought back 1.3 million shares of its common stock for $64.6 million.

Our Take

SEI Investments’ innovative and diverse global investment products and services position it well to grow organically. Also, robust asset growth and acquisition of Archway Technology Partners are expected to support profitability. Further, impressive capital deployment activities should enhance shareholder value.

However, elevated expenses and increased reliance on fee-based revenues remain primary concerns for the company.

SEI Investments Company Price, Consensus and EPS Surprise
 

SEI Investments Company Price, Consensus and EPS Surprise | SEI Investments Company Quote

Currently, SEI Investments carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Among other Investment managers, Ameriprise Financial, Inc. (AMP - Free Report) reported second-quarter 2017 operating earnings per share of $2.80, which comfortably beat the Zacks Consensus Estimate of $2.62. Results came in better than expected, primarily due to a rise in revenues along with lower expenses.

BlackRock, Inc. (BLK - Free Report) reported second-quarter 2017 adjusted earnings of $5.24 per share, which lagged the Zacks Consensus Estimate of $5.39. Lower-than-expected results were primarily due to a rise in operating expenses and lower investment advisory performance fees. However, increase in investment advisory, administration fees and securities lending revenues, along with growth in assets under management acted as tailwinds.

Waddell & Reed Financial Inc. (WDR - Free Report) is slated to release its numbers on Aug 1.

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