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What's in Store for Affiliated Managers (AMG) in Q4 Earnings?

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Affiliated Managers Group Inc. AMG is slated to report fourth-quarter and 2019 results on Feb 3, before the opening bell. While its earnings in the quarter are likely to have improved on a year-over-year basis, revenues are expected to have witnessed a decline.

In the last reported quarter, the company’s economic earnings surpassed the Zacks Consensus Estimate. Results benefited from a decline in expenses and robust liquidity position. However, lower revenues and fall in assets under management (AUM) were the undermining factors.

The company boasts an impressive earnings surprise history. Its earnings surpassed the consensus estimate in three of the trailing four quarters, the average beat being 1.3%.

Affiliated Managers Group, Inc. Price and EPS Surprise

Affiliated Managers Group, Inc. Price and EPS Surprise

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

Activities of the company in the fourth quarter encouraged analysts to revise earnings estimates upward. Thus, the Zacks Consensus Estimate for its earnings of $4.03 for the to-be-reported quarter has increased marginally over the past seven days. Also, it indicates a rise of 14.2% from the year-ago quarter’s reported figure.

However, the consensus estimate for sales is pegged at $537.6 million, indicating a fall of 4.8% from the year-ago quarter.

Key Expectations for Q4

Based on the assumptions of net performance fees of 20-60 cents per share, repositioning charges of 15-30 cents per share and the divestiture of BlueMountain, management expects the ratio of adjusted earnings before interest, taxes, depreciation and amortization to average AUM to be in the range of 10.5-12.5 basis points (bps).

On the cost front, management projects total interest expenses of around $19 million.

Also, the company’s share of amortization and impairments are expected to be $68 million.

Earnings Whispers

Now, let’s check what our quantitative model predicts.

According to our quantitative model, chances of Affiliated Managers beating the Zacks Consensus Estimate in the fourth quarter are high. This is because it has the right combination of the two key ingredients — a positive Earnings ESP and a Zacks Rank #3 (Hold) or higher, which is required to be confident of an earnings surprise call.

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 Affiliated Managers is +3.89%.

Zacks Rank: The company currently carries a Zacks Rank #3.

Other Stocks That Warrant a Look

Here are some other finance stocks that you may want to consider, as according to our model, these too have the right combination of elements to post an earnings beat in their upcoming releases.

Cincinnati Financial Corporation CINF is slated to release results on Feb 5. It currently has an Earnings ESP of +1.95% and a Zacks Rank #3.

CNA Financial Corporation (CNA - Free Report) is slated to release results on Feb 10. It has an Earnings ESP of +4.56% and a Zacks Rank #3.

Essent Group Ltd. ESNT is slated to release results on Feb 14. It presently has an Earnings ESP of +1.26% and a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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