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Evercore (EVR - Free Report) reported first-quarter 2020 adjusted earnings per share of $1.21, beating the Zacks Consensus Estimate of $1.03. However, results were down 27% from the prior-year quarter’s $1.66 per share.
The quarterly results reflect higher revenues. In addition, liquidity position was consistently strong. However, escalating expenses and fall in assets under management (AUM) were major drags, increasing investors’ concerns. Hence, following the results, shares of the company declined 5.9%.
Including certain one-time items, on a GAAP basis, net income available to common shareholders was $31.2 million or 74 cents per share compared with $67.2 million or $1.52 per share in the year-ago quarter.
Revenues Increase, Expenses Rise
Net revenues increased 4% year over year to $435 million in the reported quarter. This upside resulted from a hike in advisory fees (up 10%), along with commissions and trades (32%). The figure also surpassed the Zacks Consensus Estimate of $420 million. On a GAAP basis, net revenues were $427 million, up 3%.
Total expenses flared up 14% to $365 million from the prior-year quarter. This upswing mainly stemmed from rise in employee compensation and benefits expenses.
Adjusted compensation ratio was 62%, up from the year-earlier quarter’s 58%.
Adjusted operating margin came in at 19% compared with the prior-year quarter’s 22.8%.
Quarterly Segment Performance (Adjusted)
Investment Banking: Net revenues jumped 4% year over year to $419 million. Yet, operating income slid 14% to $79.2 million. Advisory client transactions were 222,000, up 2% year over year.
Investment Management: Net revenues were $15.9 million, down 1% from the prior year’s comparable quarter. Operating income was $3.3 million, down 15% year over year. Additionally, an AUM of $9.5 million was reported in the first quarter, down 2% year over year.
Balance-Sheet Position
As of Mar 31, 2020, cash, cash equivalents, marketable securities and certificates of deposit totaled $852.3 million. Moreover, current assets exceeded current liabilities by $879.6 million as of the same date.
Capital Deployment
During the March-end quarter, the company repurchased 0.8 million shares at an average cost of $76.02 per share.
Our Viewpoint
Evercore displayed an impressive performance during the January-March quarter. Its top-line strength displays earnings stability. Apart from this, the company’s strategic initiatives to bolster its investment banking segment bode well. Also, it is well poised to undertake any opportunistic expansion given its sound liquidity position. Nevertheless, escalating expenses are a concern.
Charles Schwab’s (SCHW - Free Report) first-quarter 2020 adjusted earnings of 62 cents per share lagged the Zacks Consensus Estimate of 64 cents. Also, the bottom line decreased 10% from the prior-year quarter. Results for the reported quarter excluded the $37-million expenses relating to the three pending acquisitions and $27-million charges for certain actions taken in response to the coronavirus pandemic.
Interactive Brokers Group’s (IBKR - Free Report) first-quarter 2020 adjusted earnings per share of 69 cents surpassed the Zacks Consensus Estimate of 67 cents. The figure came in 25.5% higher than the prior-year earnings. Increase in daily average revenue trades (DARTs), mainly owing to the coronavirus-induced volatility, supported the results. However, lower revenues and rise in expenses acted as headwinds.
Among others, Raymond James (RJF - Free Report) is scheduled to announce quarterly results on Apr 29.
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A select few stocks could skyrocket the most as rollout accelerates for this new tech. Early investors could see gains similar to buying Microsoft in the 1990s. Zacks’ just-released special report reveals 8 stocks to watch. The report is only available for a limited time.
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Evercore (EVR) Q1 Earnings Impressive, Stock Declines 5.9%
Evercore (EVR - Free Report) reported first-quarter 2020 adjusted earnings per share of $1.21, beating the Zacks Consensus Estimate of $1.03. However, results were down 27% from the prior-year quarter’s $1.66 per share.
The quarterly results reflect higher revenues. In addition, liquidity position was consistently strong. However, escalating expenses and fall in assets under management (AUM) were major drags, increasing investors’ concerns. Hence, following the results, shares of the company declined 5.9%.
Including certain one-time items, on a GAAP basis, net income available to common shareholders was $31.2 million or 74 cents per share compared with $67.2 million or $1.52 per share in the year-ago quarter.
Revenues Increase, Expenses Rise
Net revenues increased 4% year over year to $435 million in the reported quarter. This upside resulted from a hike in advisory fees (up 10%), along with commissions and trades (32%). The figure also surpassed the Zacks Consensus Estimate of $420 million. On a GAAP basis, net revenues were $427 million, up 3%.
Total expenses flared up 14% to $365 million from the prior-year quarter. This upswing mainly stemmed from rise in employee compensation and benefits expenses.
Adjusted compensation ratio was 62%, up from the year-earlier quarter’s 58%.
Adjusted operating margin came in at 19% compared with the prior-year quarter’s 22.8%.
Quarterly Segment Performance (Adjusted)
Investment Banking: Net revenues jumped 4% year over year to $419 million. Yet, operating income slid 14% to $79.2 million. Advisory client transactions were 222,000, up 2% year over year.
Investment Management: Net revenues were $15.9 million, down 1% from the prior year’s comparable quarter. Operating income was $3.3 million, down 15% year over year. Additionally, an AUM of $9.5 million was reported in the first quarter, down 2% year over year.
Balance-Sheet Position
As of Mar 31, 2020, cash, cash equivalents, marketable securities and certificates of deposit totaled $852.3 million. Moreover, current assets exceeded current liabilities by $879.6 million as of the same date.
Capital Deployment
During the March-end quarter, the company repurchased 0.8 million shares at an average cost of $76.02 per share.
Our Viewpoint
Evercore displayed an impressive performance during the January-March quarter. Its top-line strength displays earnings stability. Apart from this, the company’s strategic initiatives to bolster its investment banking segment bode well. Also, it is well poised to undertake any opportunistic expansion given its sound liquidity position. Nevertheless, escalating expenses are a concern.
Evercore Inc Price, Consensus and EPS Surprise
Evercore Inc price-consensus-eps-surprise-chart | Evercore Inc Quote
Currently, Evercore carries a Zacks Rank #5 (Strong Sell).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Performance of Other Banks
Charles Schwab’s (SCHW - Free Report) first-quarter 2020 adjusted earnings of 62 cents per share lagged the Zacks Consensus Estimate of 64 cents. Also, the bottom line decreased 10% from the prior-year quarter. Results for the reported quarter excluded the $37-million expenses relating to the three pending acquisitions and $27-million charges for certain actions taken in response to the coronavirus pandemic.
Interactive Brokers Group’s (IBKR - Free Report) first-quarter 2020 adjusted earnings per share of 69 cents surpassed the Zacks Consensus Estimate of 67 cents. The figure came in 25.5% higher than the prior-year earnings. Increase in daily average revenue trades (DARTs), mainly owing to the coronavirus-induced volatility, supported the results. However, lower revenues and rise in expenses acted as headwinds.
Among others, Raymond James (RJF - Free Report) is scheduled to announce quarterly results on Apr 29.
Biggest Tech Breakthrough in a Generation
Be among the early investors in the new type of device that experts say could impact society as much as the discovery of electricity. Current technology will soon be outdated and replaced by these new devices. In the process, it’s expected to create 22 million jobs and generate $12.3 trillion in activity.
A select few stocks could skyrocket the most as rollout accelerates for this new tech. Early investors could see gains similar to buying Microsoft in the 1990s. Zacks’ just-released special report reveals 8 stocks to watch. The report is only available for a limited time.
See 8 breakthrough stocks now>>