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Cohen & Steers' (CNS) Q2 Earnings Miss, Expenses Flare Up

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Cohen & Steers’ (CNS - Free Report) second-quarter 2018 adjusted earnings came in at 59 cents per share, missing the Zacks Consensus Estimate by 3 cents. However, the reported figure came in 18% higher than the year-ago quarter tally.

Results were driven by an increase in revenues. Nonetheless, the positives were more than offset by higher operating expenses. Though net income increased on a year-over-year basis, it was primarily a result of lower tax rates and loss attributable to redeemable non-controlling interest.

Net income available to common stockholders (GAAP basis) was $30 million, up 27.6% from the prior-year quarter.

Revenue Growth Offset by Elevated Expenses

The company’s quarterly revenues (GAAP basis) came in at $94.4 million, inching up 1.8% from the year-ago quarter. The rise was primarily driven by an increase in investment advisory and administration fees.  However, distribution and service fees, along with portfolio consulting and other revenues, witnessed a marginal decline.

Total expenses (GAAP basis) amounted to $58.1million, increasing 5% year over year. This resulted from rise in employee compensation and benefits, general and administrative expenses, and depreciation and amortization expenses.

Operating income (GAAP basis) came in at $36.3 million, down 2.9% year over year.

AUM & Inflows

As of Jun 30, 2018, AUM was $60.2 billion, down marginally from the year-earlier quarter. Notably, the company witnessed long-term net inflows of $180 million in the reported quarter against inflows of $1330 million recorded in the prior-year quarter.

Also, average AUM for the April-June quarter totaled $58.7 billion, down 1.6% from the comparable period last year.

Our Viewpoint

Though Cohen & Steers’ AUM for second quarter 2018 declined on a year-over-year basis, its consistent growth in AUM over the last five years will likely supplement top line. In addition, lower tax rates are expected to support its bottom-line growth. Nevertheless, elevated expenses continue to dampen the company’s performance.

Cohen & Steers Inc Price, Consensus and EPS Surprise

Cohen & Steers Inc Price, Consensus and EPS Surprise | Cohen & Steers Inc Quote

Cohen & Steers currently has a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Among other stocks in the same industry, T. Rowe Price Group, Inc. (TROW - Free Report) is set to release its earnings numbers on Jul 25, while Ares Management, L.P. (ARES - Free Report) and Apollo Global Management, LLC (APO - Free Report) are slated to report their figures on Aug 2.

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