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Cohen & Steers (CNS) Lags on Q2 Earnings as Costs Increase

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Cohen & Steers’ (CNS - Free Report) second-quarter 2019 adjusted earnings of 62 cents per share lagged the Zacks Consensus Estimate of 63 cents. However, the bottom line was 5.1% higher than the year-ago quarter figure.

Results were adversely impacted by rise in expenses. Nonetheless, improvement in assets under management (AUM) and higher revenues acted as tailwinds.

Net income available to common stockholders (GAAP basis) was $31.3 million or 65 cents per share, up from $30 million or 63 cents per share in the prior-year quarter.

Revenues Improve, Expenses Rise

Revenues (GAAP basis) were $101.8 million in the quarter, up 7.8% from the year-ago quarter. An increase in all three components of revenues supported this upside.

Total expenses (GAAP basis) amounted to $63.7 million, up 9.6% year over year. This increase was largely due to rise in employee compensation and benefits expenses, and distribution and service fees.

Operating income (GAAP basis) was $38.1 million, up 5% year over year.

Total non-operating income was $4.5 million against non-operating loss of $0.8 million in the prior-year quarter.

AUM Improves Despite Net Outflows

As of Jun 30, 2019, AUM was $62.4 billion, up nearly 3.6% from the year-earlier quarter. The company witnessed net outflows of $13 million in the reported quarter against inflows of $180 million a year ago.

Also, average AUM for the reported quarter totaled $63 billion, up nearly 7.2% year over year.

Our Viewpoint

The company’s diverse investment products are expected to continue supporting revenue growth. While increasing expenses, as witnessed in the reported quarter are likely to hurt profitability to some extent, continuous rise in AUM will likely support growth.

Cohen & Steers Inc Price, Consensus and EPS Surprise
 

Cohen & Steers Inc Price, Consensus and EPS Surprise

Cohen & Steers Inc price-consensus-eps-surprise-chart | Cohen & Steers Inc Quote

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

Release Dates of Other Asset Managers

BlackRock, Inc. (BLK - Free Report) is slated to report second-quarter 2019 results on Jul 19. Ameriprise Financial (AMP - Free Report) and Invesco (IVZ - Free Report) are slated to report quarterly results on Jul 23 and Jul 25, respectively.

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