AllianceBernstein Holding L.P. (AB) posted impressive third quarter results late last month, which boosted 4 out of 5 total estimates for 2012 in the last 30 days. This Zacks #1 Rank (Strong Buy) global investment management firm has now surpassed the Zacks Consensus Estimate for three straight quarters. It also hit a new 52-week high on November 23 and jumped 44.9% year-to-date.
Impressive Third Quarter Results
AllianceBernstein's third quarter adjusted earnings per share of 36 cents surpassed the Zacks Consensus Estimate by 33.3% and the year-ago earnings by 20%. The improvement was primarily thanks to a decrease in expenses.
Net revenues (adjusted basis) declined 5% year over year to $574 million, due mainly to a drop in base fees on lower average assets and reduced Bernstein Research Services revenues. However, operating expenses of $458 million declined 7% year over year, reflecting reductions in compensation and benefits, promotion and servicing as well as general and administrative expenses. Operating income grew 8% year over year to $116 million, as expense reductions outpaced the year-over-year decline in revenues.
As of September 30, 2012, total assets under management (:AUM) grew 4.2% from the year-ago quarter to $418.9 billion. Net outflows of $4.4 billion were $11.0 billion lower from the prior-year period.
Earnings Momentum on the Rise
The past 30 days have seen an advance in 4 out of 5 estimates for 2012, lifting the Zacks Consensus Estimate by 13.0% to $1.22 per share. For 2013, the Zacks Consensus Estimate is up 10.2% to $1.40 as 6 of 7 estimates were enhanced. The Zacks Consensus Estimate for 2012 reflects year-over-year growth of about 6.8%, while the growth rate for 2013 is 15.2%.
Chart Shows Strength
AllianceBernstein has enjoyed strong price momentum since the third quarter earnings release. Moreover, the company has been continuously outperforming its 200-day and 50-day moving averages and the S&P 500 over the last three months. The year-to-date return for the stock is 44.9%, compared with the S&P 500's return of 10.3%.
Based in New York, New York and founded in 1987, AllianceBernstein offers research, diversified investment management and related services to a range of clients in the United States and internationally. Furthermore, it provides distribution, shareholder servicing and administrative services to its sponsored mutual funds. The company serves clients in major global markets through operations in 46 cities. AllianceBernstein Corporation serves as the general partner of the company while AllianceBernstein Holding L.P. operates as a subsidiary of AXA. With a market cap of about $1.9 billion, AllianceBernstein competes with Virtus Investment Partners, Inc. (VRTS), among others.
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