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Evercore (EVR) Q2 Earnings Beat Estimates, Revenues Rise

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Evercore (EVR - Free Report) delivered a positive earnings surprise of 17.9% in second-quarter 2018. Adjusted earnings per share of $1.65 surpassed the Zacks Consensus Estimate of $1.40. Also, the figure was 55.7% higher than the prior-year quarter.

Results benefited from an improvement in revenues and rise in assets under management (AUM). Further, the investment banking segment continued to perform decently due to increase in underwriting and advisory fees. However, higher expenses remained the undermining factor.

Net income available to common shareholders was $68.9 million, up significantly year over year from $18.2 million.

Revenue Improvement Offset by Expense Rise

Adjusted net revenues were $443.6 million, climbing 19% year over year. The growth was supported mainly by higher underwriting fees and advisory fees.

Total expenses rose 6% to $343.7 million from the prior-year quarter. All expense components increased on a year-over-year basis.

Adjusted operating margin improved to 26% from 24.7% recorded last year.

Quarterly Segment Performance (on adjusted basis)

Investment Banking: Net revenues increased 20% year over year to $428.6 million. Operating income rose 25% to $111.1 million. Advisory client transactions were 216,000, up 13% from the year-ago quarter.

Investment Management: Net revenues were $14.9 million, down 18% from the prior-year quarter. Operating income was $4.2 million compared with $2.9 million in the year-ago quarter. AUM of $9.6 million was recorded in the second quarter, up 10% year over year.  

Balance Sheet Position

As of Jun 30, 2018, cash, cash equivalents and marketable securities totaled $653.9 million. Further, current assets exceeded current liabilities by $567.5 million as on the same date.

Our Viewpoint

Evercore’s second-quarter results seem to be decent. The company benefits from consistently rising investment banking revenues that have grown over time due to its strategic initiatives to bolster the segment. Also, it remains well poised to undertake any opportunistic expansions given its sound liquidity position.

Evercore Inc Price, Consensus and EPS Surprise

Currently, Evercore carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank stocks here.

Performance of Other Investment Banks

TD Ameritrade Holding Corporation (AMTD - Free Report) pulled off a positive earnings surprise of 12.7% in third-quarter fiscal 2018 (ending Jun 30). The company reported earnings of 89 cents per share, significantly beating the Zacks Consensus Estimate of 79 cents. Moreover, results were up 85% from the prior-year quarter.

Reflecting the highest strong second-quarter net revenues in nine years, Goldman Sachs’ (GS - Free Report) pulled off a positive earnings surprise of 28.1% in second-quarter 2018. The company reported earnings per share of $5.98, comfortably beating the Zacks Consensus Estimate of $4.67. Further, the bottom line witnessed 51.4% year-over-year improvement.

E*TRADE Financial (ETFC - Free Report) delivered a positive earnings surprise of 6.7% in second-quarter 2018. Earnings of 95 cents per share easily surpassed the Zacks Consensus Estimate of 89 cents. Moreover, results compared favorably with 70 cents recorded in the prior-year quarter.

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