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Affiliated Managers (AMG) Q2 Earnings & Revenues Decline Y/Y

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Amid a challenging operating environment, Affiliated Managers Group Inc.’s (AMG - Free Report) second-quarter 2019 economic earnings of $3.33 per share declined 7.8% year over year. However, the figure beat the Zacks Consensus Estimate of $3.19.

Results were adversely impacted by decline in revenues, fall in assets under management (AUM) balance and higher expenses. Nonetheless, robust liquidity position acted as a tailwind.

Economic net income was $170.1 million, down 13% from the prior-year quarter.

Revenues Down, Expenses Rise

Total revenues fell 1.4% year over year to $591.9 million. However, the top line beat the Zacks Consensus Estimate of $546.5 million.

Adjusted earnings before interest, taxes, depreciation and amortization were $219.3 million, down 10.9% from the year-ago quarter.

Total expenses increased 1.2% to $412.6 million. Higher compensation and related expenses, and net other expenses mainly led to the rise.

As of Jun 30, 2019, total AUM was $772.2 billion, down 6.3% year over year. Net outflows of $15.1 billion hurt AUM.

Capital & Liquidity Position Decent

As of Jun 30, 2019, Affiliated Managers had $360 million in cash and cash equivalents compared with $565.5 million as of Dec 31, 2018. Notably, the company had $1.79 billion of debt, down 2.1% from the Dec 31, 2018 level.

Shareholders’ equity as of Jun 30, 2019, was $3.23 billion, down from $3.46 billion as of Dec 31, 2018.

Share Repurchase Update

During the reported quarter, the company repurchased shares worth $50 million.

Our Take

Affiliated Managers’ muted revenue growth, owing to significant market volatility, remains a major concern. Nevertheless, it is well positioned for growth, based on successful partnerships and global distribution capability along with a diverse product mix.

Affiliated Managers Group, Inc. Price, Consensus and EPS Surprise

 

Affiliated Managers Group, Inc. Price, Consensus and EPS Surprise

Affiliated Managers Group, Inc. price-consensus-eps-surprise-chart | Affiliated Managers Group, Inc. Quote

Affiliated Managers currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Performance of Other Asset Managers

Blackstone (BX - Free Report) reported second-quarter distributable earnings of 57 cents, beating the Zacks Consensus Estimate of 50 cents. Moreover, the figure reflected improvement from 56 cents earned in the prior-year quarter. Results benefited from growth in AUM and lower expenses. However, a decline in revenues acted as a headwind.

BlackRock, Inc.’s (BLK - Free Report) second-quarter adjusted earnings of $6.41 per share lagged the Zacks Consensus Estimate of $6.52. Moreover, the figure was 3.8% lower than the year-ago quarter’s number. Results were hurt by a decline in revenues along with higher expenses. Nevertheless, growth in AUM supported results to some extent.

Invesco (IVZ - Free Report) reported second-quarter 2019 adjusted earnings of 65 cents per share, beating the Zacks Consensus Estimate of 57 cents. However, the bottom line was 1.5% below the prior-year quarter figure. Results benefited from improvement in AUM balance and rise in revenues, driven by the OppenheimerFunds buyout. However, increase in operating expenses and net outflows were the undermining factors.

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