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Moelis & Company (MC) Q4 Earnings Beat, Revenues Down Y/Y
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Moelis & Company’s (MC - Free Report) fourth-quarter 2019 adjusted earnings of 38 cents per share easily surpassed the Zacks Consensus Estimate of 25 cents. However, the figure decreased 51% year over year.
Results reflect higher other income and solid liquidity position. However, rise in operating expenses and lower revenues acted as headwinds.
Net income (GAAP basis) was $27.2 million or 38 cents per share, down from $56 million or 72 cents recorded in the prior-year quarter.
In 2019, adjusted earnings of $1.96 per share beat the consensus estimate of $1.83. However, it declined 35% year over year. Net income (GAAP basis) was $135.7 million or $1.89 per share, down from $208 million or $2.78 per share in 2018.
Revenues Decline, Costs Rise
Total revenues in the quarter fell 6% year over year to $223.5 million. The decline was primarily due to lower number of completed transactions, partially offset by higher average fees earned per completed transaction. Nonetheless, the top line surpassed the Zacks Consensus Estimate of $204.5 million.
In 2019, net revenues were $746.5 million, down 16%. However, the figure outpaced the Zacks Consensus Estimate of $733.1 million.
Total operating expenses (adjusted basis) were $201.6 million, up 16% year over year. Increase in both compensation and benefits costs led to this rise.
Other income (adjusted basis) was $6.4 million, up 32% from the year-ago quarter.
As of Dec 31, 2019, the company had cash and liquid investments of $341.8 million.
Share Repurchases
During 2019, Moelis & Company repurchased nearly 1.3 million shares for $51.2 million.
Dividend Hike
Moelis & Company announced a special dividend of 75 cents per share, and hiked quarterly dividend by 2% to 51 cents per share. Both these dividends will be paid out on Mar 27 to shareholders of record as on Feb 18.
Our Take
Moelis & Company’s global expansion initiatives, along with strategic partnerships in Japan and Mexico, are likely to support revenues. However, its hiring trend is likely to lead to a persistent increase in overall costs. Thus, higher expenses might hamper bottom-line growth to an extent.
Moelis & Company Price, Consensus and EPS Surprise
LPL Financial’s (LPLA - Free Report) fourth-quarter 2019 adjusted earnings of $1.68 per share surpassed the Zacks Consensus Estimate of $1.62. The figure reflects an increase of 13% from the prior-year quarter.
Interactive Brokers Group (IBKR - Free Report) recorded fourth-quarter 2019 adjusted earnings per share of 58 cents. The figure matched the prior-year quarter’s earnings.
Evercore’s (EVR - Free Report) fourth-quarter adjusted earnings per share of $2.72 surpassed the Zacks Consensus Estimate of $2.14. However, the bottom line declined 31% from the prior-year quarter.
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Moelis & Company (MC) Q4 Earnings Beat, Revenues Down Y/Y
Moelis & Company’s (MC - Free Report) fourth-quarter 2019 adjusted earnings of 38 cents per share easily surpassed the Zacks Consensus Estimate of 25 cents. However, the figure decreased 51% year over year.
Results reflect higher other income and solid liquidity position. However, rise in operating expenses and lower revenues acted as headwinds.
Net income (GAAP basis) was $27.2 million or 38 cents per share, down from $56 million or 72 cents recorded in the prior-year quarter.
In 2019, adjusted earnings of $1.96 per share beat the consensus estimate of $1.83. However, it declined 35% year over year. Net income (GAAP basis) was $135.7 million or $1.89 per share, down from $208 million or $2.78 per share in 2018.
Revenues Decline, Costs Rise
Total revenues in the quarter fell 6% year over year to $223.5 million. The decline was primarily due to lower number of completed transactions, partially offset by higher average fees earned per completed transaction. Nonetheless, the top line surpassed the Zacks Consensus Estimate of $204.5 million.
In 2019, net revenues were $746.5 million, down 16%. However, the figure outpaced the Zacks Consensus Estimate of $733.1 million.
Total operating expenses (adjusted basis) were $201.6 million, up 16% year over year. Increase in both compensation and benefits costs led to this rise.
Other income (adjusted basis) was $6.4 million, up 32% from the year-ago quarter.
As of Dec 31, 2019, the company had cash and liquid investments of $341.8 million.
Share Repurchases
During 2019, Moelis & Company repurchased nearly 1.3 million shares for $51.2 million.
Dividend Hike
Moelis & Company announced a special dividend of 75 cents per share, and hiked quarterly dividend by 2% to 51 cents per share. Both these dividends will be paid out on Mar 27 to shareholders of record as on Feb 18.
Our Take
Moelis & Company’s global expansion initiatives, along with strategic partnerships in Japan and Mexico, are likely to support revenues. However, its hiring trend is likely to lead to a persistent increase in overall costs. Thus, higher expenses might hamper bottom-line growth to an extent.
Moelis & Company Price, Consensus and EPS Surprise
Moelis & Company price-consensus-eps-surprise-chart | Moelis & Company Quote
Currently, Moelis & Company 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 Investment Banks
LPL Financial’s (LPLA - Free Report) fourth-quarter 2019 adjusted earnings of $1.68 per share surpassed the Zacks Consensus Estimate of $1.62. The figure reflects an increase of 13% from the prior-year quarter.
Interactive Brokers Group (IBKR - Free Report) recorded fourth-quarter 2019 adjusted earnings per share of 58 cents. The figure matched the prior-year quarter’s earnings.
Evercore’s (EVR - Free Report) fourth-quarter adjusted earnings per share of $2.72 surpassed the Zacks Consensus Estimate of $2.14. However, the bottom line declined 31% from the prior-year quarter.
More Stock News: This Is Bigger than the iPhone!
It could become the mother of all technological revolutions. Apple sold a mere 1 billion iPhones in 10 years but a new breakthrough is expected to generate more than 27 billion devices in just 3 years, creating a $1.7 trillion market.
Zacks has just released a Special Report that spotlights this fast-emerging phenomenon and 6 tickers for taking advantage of it. If you don't buy now, you may kick yourself in 2020.
Click here for the 6 trades >>