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What's in Store for AllianceBernstein (AB) in Q3 Earnings?

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AllianceBernstein Holding L.P. (AB - Free Report) is scheduled to report third-quarter 2018 results on Oct 24, before the opening bell. Its revenues and earnings are projected to grow on a year-over-year basis.

In the last reported quarter, the company’s earnings per unit surpassed the Zacks Consensus Estimate. Growth in assets under management (AUM) and rise in revenues were partially offset by higher expenses.

AllianceBernstein boasts an impressive earnings surprise history. Its earnings have surpassed estimates in three of the trailing four quarters with an average positive surprise of 9.9%.

Also, activities of the company in the third quarter won analysts’ confidence. As a result, its Zacks Consensus Estimate for earnings of 62 cents has moved 3.3% upward over the past 30 days. The figure reflects a year-over-year improvement of 21.6%. The consensus estimate for sales of $716.2 million reflects a rise of 8.4%.

Factors to Influence Results

Per the monthly metrics data released by AllianceBernstein, its preliminary AUM of $550 billion as of Sep 30, 2018, was up from $539.8 billion as of Jun 30, 2018. The increase is expected to be mainly driven by strong inflows in retail channel.

Given the increase in AUM in the quarter and an improvement in the overall economic scenario, performance fee is expected to rise in the to-be-reported quarter. Further, base fees are projected to record an uptrend driven by similar reasons.

AllianceBernstein is also likely to record a rise in interest expenses in the third quarter as increase in interest rates will lead it to pay higher interest on broker-dealer customer balances.

Further, because of rise in compensation and benefit costs, AllianceBernstein’s overall expenses remained elevated in the past few years. Moreover, as its well-performing funds require more headcount, expenses are likely to increase further during the quarter.

Here is what our quantitative model predicts:

We cannot conclusively predict whether AllianceBernsteinwill beat the Zacks Consensus Estimate this time. This is because it doesn’t have the right combination of the two key ingredients — a positive Earnings ESP and Zacks Rank #3 (Hold) or higher — for increasing the odds of an earnings beat.

You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Earnings ESP: The Earnings ESP for AllianceBernstein is 0.00%.

Zacks Rank: AllianceBernstein currently has a Zacks Rank of 3, which increases the predictive power of ESP. But we need to have a positive Earnings ESP to be sure of the positive surprise.

Stocks That Warrant a Look

Here are some finance stocks that you may want to consider, as according to our model, these have the right combination of elements to post an earnings beat this quarter.

SVB Financial Group (SIVB - Free Report) is slated to report third-quarter 2018 results on Oct 25. It has an Earnings ESP of +1.22% and sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Cullen/Frost Bankers (CFR - Free Report) is also slated to release results on Oct 25. It has an Earnings ESP of +0.07% and carries a Zacks Rank #3.

T. Rowe Price Group (TROW - Free Report) has an Earnings ESP of +0.78% and carries a Zacks Rank #2 (Buy). It is set to report September quarter-end results on Oct 25.

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