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Solid Equity Markets to Aid Artisan Partners (APAM) Q4 Earnings

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Artisan Partners Asset Management Inc. (APAM - Free Report) is scheduled to report fourth-quarter 2019 results, after the market on Feb 4. The company’s revenues and earnings are projected to reflect year-over-year increases.

This Milwaukee, WI-based asset manager’s third-quarter 2019 earnings came in line with the Zacks Consensus Estimate. Lower expenses were negated by fall in assets under management (AUM) and reduced revenues.

Artisan Partners recorded positive earnings surprise in two out of the trailing four quarters and in-line results in one, the average beat being 0.44%.

Further, the company’s activities in the fourth quarter were inadequate to win analysts’ confidence. As a result, the Zacks Consensus Estimate for earnings of 73 cents remained unrevised, over the last seven days. The figure indicates a year-over-year increase of 19.7%.

The Zacks Consensus Estimate for quarterly sales of $209.2 million reflects an increase of 9.2% from the year-ago reported figure.

Let’s see how things have shaped up for this announcement.

The company does not have the right combination of the two key ingredients for a possible earnings beat — a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or at least 3 (Hold).

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 the stock is currently pegged at 0.00%.

Zacks Rank: Artisan Partners currently sports a Zacks Rank of 1, which increases the predictive power of ESP. But we also need to have a positive ESP to be confident of a positive earnings surprise. You can see the complete list of today’s Zacks #1 Rank stocks here.

Factors That Might Have Influenced Q4 Results

Overall Outflows Affect AUM: Net outflows from the U.S. Mid-Cap Growth, U.S. Mid-Cap Value, and Non-U.S. Growth strategies are likely to have weighed on firm wide net flows. This is likely to have affected AUM growth in the fourth quarter.

Higher AUM to Drive Revenue Growth: The performance of equity markets was impressive in the quarter, with the S&P 500 Index rallying 9.07% sequentially. Therefore, the company’s results will likely reflect a rise in AUM. Per the monthly metrics data published by Artisan Partners, its total AUM as of Dec 31, 2019, was $121 billion, up 25.8% from prior-year level. Thus, given the rise in AUM, performance fees and investment management fees are likely to have escalated in the fourth quarter.

Costs Might Increase: Artisan Partners’ investments in technology and communications, along with efforts to expand operations, are likely to have flared up costs in this quarter.

Among other finance stocks, The Carlyle Group L.P. CG, PennyMac Financial Services, Inc. PFSI and Fidelity National Information Services, Inc. FIS are slated to release results on Feb 5, Feb 6 and Feb 13, respectively.

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