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SEI Investments (SEIC) Beats on Q3 Earnings, Revenues Grow
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SEI Investments Co.’s (SEIC - Free Report) third-quarter 2019 earnings of 86 cents per share surpassed the Zacks Consensus Estimate of 83 cents. The figure reflects a rise of 7.5% from the prior-year quarter.
Results were primarily driven by growth in revenues and lower expenses. However, a decline in assets under management (AUM) was a headwind.
Net income was $132.2 million, up from $128.3 million recorded in the year-ago quarter.
Revenues Improve, Expenses & AUM Decline
Total revenues were $416.3 million, up 1.9% year over year. The rise reflected higher asset management, administration and distribution fees. Moreover, the reported figure marginally surpassed the Zacks Consensus Estimate of $416 million.
Total expenses were $295.6 million, down marginally year over year. The contraction was led by a fall in almost all components of expenses, except for compensation, benefits and other personnel expenses, data processing and computer-related expenses, depreciation costs, and amortization expenses.
Operating income increased 7.3% year over year to $120.6 million.
As of Sep 30, 2019, AUM was $334.7 billion, reflecting a decline of nearly 1.3% from the prior-year quarter. Client assets under administration (AUA) were $662 billion, up 15% year over year. Note that client AUA does not include $12.4 billion related to Funds of Funds assets that were reported on Sep 30, 2019.
Share Repurchase
In the reported quarter, SEI Investments bought back 1.4 million shares for $81.4 million.
Our Take
SEI Investments is well positioned for organic growth, given its innovative and diverse global investment products and services. However, despite a fall in expenses in the third quarter, overall costs are likely to remain elevated in the near term due to higher compensation costs. This will likely hurt bottom-line growth to some extent.
SEI Investments Company Price, Consensus and EPS Surprise
BlackRock, Inc.’s (BLK - Free Report) third-quarter 2019 adjusted earnings of $7.15 per share surpassed the Zacks Consensus Estimate of $6.95. However, the figure was 4.9% lower than the year-ago quarter’s number.
Blackstone’s (BX - Free Report) third-quarter 2019 distributable earnings of 58 cents surpassed the Zacks Consensus Estimate of 54 cents. However, the figure declined from 63 cents earned in the prior-year quarter.
Cohen & Steers’ (CNS - Free Report) third-quarter 2019 adjusted earnings of 65 cents per share beat the Zacks Consensus Estimate of 63 cents. Also, the bottom line was 1.6% higher than the year-ago quarter figure.
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SEI Investments (SEIC) Beats on Q3 Earnings, Revenues Grow
SEI Investments Co.’s (SEIC - Free Report) third-quarter 2019 earnings of 86 cents per share surpassed the Zacks Consensus Estimate of 83 cents. The figure reflects a rise of 7.5% from the prior-year quarter.
Results were primarily driven by growth in revenues and lower expenses. However, a decline in assets under management (AUM) was a headwind.
Net income was $132.2 million, up from $128.3 million recorded in the year-ago quarter.
Revenues Improve, Expenses & AUM Decline
Total revenues were $416.3 million, up 1.9% year over year. The rise reflected higher asset management, administration and distribution fees. Moreover, the reported figure marginally surpassed the Zacks Consensus Estimate of $416 million.
Total expenses were $295.6 million, down marginally year over year. The contraction was led by a fall in almost all components of expenses, except for compensation, benefits and other personnel expenses, data processing and computer-related expenses, depreciation costs, and amortization expenses.
Operating income increased 7.3% year over year to $120.6 million.
As of Sep 30, 2019, AUM was $334.7 billion, reflecting a decline of nearly 1.3% from the prior-year quarter. Client assets under administration (AUA) were $662 billion, up 15% year over year. Note that client AUA does not include $12.4 billion related to Funds of Funds assets that were reported on Sep 30, 2019.
Share Repurchase
In the reported quarter, SEI Investments bought back 1.4 million shares for $81.4 million.
Our Take
SEI Investments is well positioned for organic growth, given its innovative and diverse global investment products and services. However, despite a fall in expenses in the third quarter, overall costs are likely to remain elevated in the near term due to higher compensation costs. This will likely hurt bottom-line growth to some extent.
SEI Investments Company Price, Consensus and EPS Surprise
SEI Investments Company price-consensus-eps-surprise-chart | SEI Investments Company Quote
Currently, SEI Investments 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
BlackRock, Inc.’s (BLK - Free Report) third-quarter 2019 adjusted earnings of $7.15 per share surpassed the Zacks Consensus Estimate of $6.95. However, the figure was 4.9% lower than the year-ago quarter’s number.
Blackstone’s (BX - Free Report) third-quarter 2019 distributable earnings of 58 cents surpassed the Zacks Consensus Estimate of 54 cents. However, the figure declined from 63 cents earned in the prior-year quarter.
Cohen & Steers’ (CNS - Free Report) third-quarter 2019 adjusted earnings of 65 cents per share beat the Zacks Consensus Estimate of 63 cents. Also, the bottom line was 1.6% higher than the year-ago quarter figure.
Today's Best Stocks from Zacks
Would you like to see the updated picks from our best market-beating strategies? From 2017 through 2018, while the S&P 500 gained +15.8%, five of our screens returned +38.0%, +61.3%, +61.6%, +68.1%, and +98.3%.
This outperformance has not just been a recent phenomenon. From 2000 – 2018, while the S&P averaged +4.8% per year, our top strategies averaged up to +56.2% per year.
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