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Lazard Shares Down as Q1 Earnings Miss Estimates, Expenses Rise Y/Y
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Key Takeaways
Lazard shares fell 6.9% after Q1 EPS of 42 cents missed estimates and declined from the prior year.
LAZ saw lower Financial Advisory and Corporate revenues, while expenses rose 12.4% Y/Y.
Lazard's Asset Management revenue rose 16.8%, and AUM grew 13.9%, partly offsetting weakness.
Shares of Lazard Inc. (LAZ - Free Report) plunged 6.9% in Friday’s trading session on lower-than-expected quarterly results. Its first-quarter 2026 adjusted earnings per share of 42 cents missed the Zacks Consensus Estimate of 52 cents. This compared unfavorably with earnings of 56 cents in the year-ago quarter.
Lazard’s results were affected by lower revenues in the Financial Advisory and Corporate segments. An increase in operating expenses was also negative. However, an increase in assets under management (AUM) and higher revenue in the Asset Management segment supported the results to some extent.
The results excluded certain non-recurring items. After considering those, Lazard’s net income (GAAP) was $100.9 million, which rose 67.1% from the prior-year quarter.
Lazard’s Revenues Increase
Quarterly adjusted net revenues were $672.9 million, which rose 4.6% year over year. However, the top line missed the Zacks Consensus Estimate by 9.5%.
Lazard’s Expenses Increase
Operating expenses increased 12.4% year over year to $667 million, primarily driven by higher compensation costs.
The ratio of adjusted compensation expenses to operating revenues was 69.9%, higher than 65.5% in the year-ago quarter.
The ratio of adjusted non-compensation expenses to operating revenues was 22.1%, down from 23% in the prior-year quarter.
Lazard’s Segmental Performance
Financial Advisory: The segment’s adjusted operating revenues were $356.2 million, down 3.6% from the year-ago quarter.
Asset Management: Segmental adjusted operating revenues of $308.8 million increased 16.8% year over year, driven by higher management fees and incentive fees.
Corporate: Adjusted operating revenues from this segment were $7.9 million, down from $9.1 million in the year-ago quarter.
LAZ’s AUM Position
As of March 31, 2026, total AUM was $259.2 billion, which increased 13.9% year over year.
The average AUM in the reported quarter was $265.5 billion, up 15% from the year-ago quarter.
Lazard’s Balance Sheet Position Weakens
The company’s cash and cash equivalents totaled $1.02 billion as of March 31, 2026, down 30.5% from the prior quarter. Total stockholders’ equity was $872.4 million, down 3.7% sequentially.
LAZ’s Share Repurchase Update
In the first quarter of 2026, Lazard did not repurchase any common stock. As of March 31, 2026, approximately $107 million of authorization remained available for repurchase.
LAZ’s Recent Developments
In April 2026, Lazard announced that it had entered into a definitive agreement to acquire Campbell Lutyens for approximately $575 million, marking a significant expansion of its private capital advisory platform. The transaction, subject to regulatory approvals, is expected to close in calendar year 2026 and is anticipated to be accretive to earnings starting in 2027.
Following the completion, the combined entity will operate as Lazard CL, forming Lazard’s third global business pillar. The platform is expected to generate around $500 million in revenue by 2027 and will include more than 280 advisory professionals across 18 offices worldwide. The integration will strengthen Lazard’s capabilities across capital formation, liquidity solutions and strategic advisory, while leveraging proprietary data and artificial intelligence tools.
Our View on LAZ
Lazard’s first-quarter 2026 performance reflects pressure on its core operations, with lower Financial Advisory and Corporate revenues. Elevated operating expenses, particularly higher compensation costs, along with weakened liquidity, continue to weigh on profitability. However, growth in the Asset Management segment and a rise in year-over-year AUM provided some support to overall results.
Blackstone’s (BX - Free Report) first-quarter 2026 distributable earnings of $1.36 per share surpassed the Zacks Consensus Estimate of $1.33. The figure soared 25% from the prior-year quarter.
BX’s results benefited from a rise in AUM balance and higher revenues. However, an increase in GAAP expenses was the undermining factor.
Franklin Resources Inc. (BEN - Free Report) reported second-quarter fiscal 2026 (ended March 31, 2026) adjusted earnings of 71 cents per share, which surpassed the Zacks Consensus Estimate of 55 cents per share. Also, the bottom line compared favorably with 47 cents reported in the year-ago quarter.
BEN’s results benefited from higher revenues. However, a slight decline in assets under management and elevated expenses remained headwinds.
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Lazard Shares Down as Q1 Earnings Miss Estimates, Expenses Rise Y/Y
Key Takeaways
Shares of Lazard Inc. (LAZ - Free Report) plunged 6.9% in Friday’s trading session on lower-than-expected quarterly results. Its first-quarter 2026 adjusted earnings per share of 42 cents missed the Zacks Consensus Estimate of 52 cents. This compared unfavorably with earnings of 56 cents in the year-ago quarter.
Lazard’s results were affected by lower revenues in the Financial Advisory and Corporate segments. An increase in operating expenses was also negative. However, an increase in assets under management (AUM) and higher revenue in the Asset Management segment supported the results to some extent.
The results excluded certain non-recurring items. After considering those, Lazard’s net income (GAAP) was $100.9 million, which rose 67.1% from the prior-year quarter.
Lazard’s Revenues Increase
Quarterly adjusted net revenues were $672.9 million, which rose 4.6% year over year. However, the top line missed the Zacks Consensus Estimate by 9.5%.
Lazard’s Expenses Increase
Operating expenses increased 12.4% year over year to $667 million, primarily driven by higher compensation costs.
The ratio of adjusted compensation expenses to operating revenues was 69.9%, higher than 65.5% in the year-ago quarter.
The ratio of adjusted non-compensation expenses to operating revenues was 22.1%, down from 23% in the prior-year quarter.
Lazard’s Segmental Performance
Financial Advisory: The segment’s adjusted operating revenues were $356.2 million, down 3.6% from the year-ago quarter.
Asset Management: Segmental adjusted operating revenues of $308.8 million increased 16.8% year over year, driven by higher management fees and incentive fees.
Corporate: Adjusted operating revenues from this segment were $7.9 million, down from $9.1 million in the year-ago quarter.
LAZ’s AUM Position
As of March 31, 2026, total AUM was $259.2 billion, which increased 13.9% year over year.
The average AUM in the reported quarter was $265.5 billion, up 15% from the year-ago quarter.
Lazard’s Balance Sheet Position Weakens
The company’s cash and cash equivalents totaled $1.02 billion as of March 31, 2026, down 30.5% from the prior quarter. Total stockholders’ equity was $872.4 million, down 3.7% sequentially.
LAZ’s Share Repurchase Update
In the first quarter of 2026, Lazard did not repurchase any common stock. As of March 31, 2026, approximately $107 million of authorization remained available for repurchase.
LAZ’s Recent Developments
In April 2026, Lazard announced that it had entered into a definitive agreement to acquire Campbell Lutyens for approximately $575 million, marking a significant expansion of its private capital advisory platform. The transaction, subject to regulatory approvals, is expected to close in calendar year 2026 and is anticipated to be accretive to earnings starting in 2027.
Following the completion, the combined entity will operate as Lazard CL, forming Lazard’s third global business pillar. The platform is expected to generate around $500 million in revenue by 2027 and will include more than 280 advisory professionals across 18 offices worldwide. The integration will strengthen Lazard’s capabilities across capital formation, liquidity solutions and strategic advisory, while leveraging proprietary data and artificial intelligence tools.
Our View on LAZ
Lazard’s first-quarter 2026 performance reflects pressure on its core operations, with lower Financial Advisory and Corporate revenues. Elevated operating expenses, particularly higher compensation costs, along with weakened liquidity, continue to weigh on profitability. However, growth in the Asset Management segment and a rise in year-over-year AUM provided some support to overall results.
Lazard, Inc. Price, Consensus and EPS Surprise
Lazard, Inc. price-consensus-eps-surprise-chart | Lazard, Inc. Quote
Currently, Lazard carries a Zacks Rank #5 (Strong Sell).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Performance of Other Asset Managers
Blackstone’s (BX - Free Report) first-quarter 2026 distributable earnings of $1.36 per share surpassed the Zacks Consensus Estimate of $1.33. The figure soared 25% from the prior-year quarter.
BX’s results benefited from a rise in AUM balance and higher revenues. However, an increase in GAAP expenses was the undermining factor.
Franklin Resources Inc. (BEN - Free Report) reported second-quarter fiscal 2026 (ended March 31, 2026) adjusted earnings of 71 cents per share, which surpassed the Zacks Consensus Estimate of 55 cents per share. Also, the bottom line compared favorably with 47 cents reported in the year-ago quarter.
BEN’s results benefited from higher revenues. However, a slight decline in assets under management and elevated expenses remained headwinds.