Affiliated Managers Group Inc.’s AMG second-quarter 2018 economic earnings of $3.61 per share have outpaced the Zacks Consensus Estimate of $3.59. Also, earnings were up 8.4% year over year.
Rise in revenues and growth in assets under management (AUM) from the prior-year quarter benefited results. Also, liquidity position remained strong during the quarter under review. However, higher operating expenses were the undermining factor.
Affiliated Managers’ economic net income was $195.6 million during the quarter under review, witnessing an increase of 3.7% from the prior-year quarter.
Revenues & Expenses Rise
Total revenues grew 5.1% year over year to $600.1 million. Also, the top line beat the Zacks Consensus Estimate of $597.7 million.
Earnings before interest, taxes, depreciation and amortization were $246.2 million, down 3.4% from the year-ago quarter.
Total operating expenses increased 3.2% year over year to $407.6 million. The rise was due to an increase in compensation and related expenses, interest expenses, and other expenses.
As of Jun 30, 2018, total AUM was $824.2 billion, up 6.7% year over year. The reported quarter also witnessed net client cash inflow of $4.3 billion.
Capital & Liquidity Position Decent
As of Jun 30, 2018, Affiliated Managers had $392.8 million in cash and cash equivalents compared with $439.5 million as of Dec 31, 2017. Notably, the company had $1.58 billion of senior bank debt, up 1.7% from the Dec 31, 2017 level.
Shareholders’ equity as of Jun 30, 2018, was $3.64 billion, down from $3.82 billion as of Dec 31, 2017.
Share Repurchase Update
During the reported quarter, the company repurchased shares worth $150 million.
Our Take
Affiliated Managers’ muted revenue growth, owing to significant market volatility, remains a major concern. Also, we remain concerned about the impact of increased debt levels and higher intangibles on its near-term profitability. Nevertheless, the company remains well positioned for growth, based on successful partnerships and global distribution capability along with a diverse product mix.
Affiliated Managers Group, Inc. Price, Consensus and EPS Surprise
Affiliated Managers Group, Inc. Price, Consensus and EPS Surprise | Affiliated Managers Group, Inc. Quote
Affiliated Managers currently carries a Zacks Rank #4 (Sell).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Performance of Other Asset Managers
BlackRock’s BLK second-quarter 2018 adjusted earnings of $6.66 per share outpaced the Zacks Consensus Estimate of $6.60. Results benefited from an improvement in revenues, rise in AUM and steady long-term inflows. However, an increase in operating expenses acted as a headwind.
The Blackstone Group L.P. BX reported second-quarter 2018 economic net income (ENI) of 90 cents per share, which handily outpaced the Zacks Consensus Estimate of 71 cents. The reported quarter witnessed a substantial jump in revenues and growth in AUM, which was mainly driven by inflows. However, rise in expenses was the undermining factor.
Ameriprise Financial Inc.’s AMP second-quarter 2018 adjusted operating earnings per share of $3.60 comfortably surpassed the Zacks Consensus Estimate of $3.51. Results benefited from an improvement in revenues. Also, growth in AUM and assets under administration (AUA) supported earnings. However, rise in expenses was an undermining factor.
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