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Affiliated Managers (AMG) Q3 Earnings Beat, Revenues Down

Zacks Equity Research

Affiliated Managers Group Inc.’s AMG third-quarter 2019 economic earnings of $3.16 per share surpassed the Zacks Consensus Estimate of $3.14. However, the figure declined 8.4% year over year.

Results benefited from decline in operating expenses and robust liquidity position. However, lower revenues and fall in assets under management (AUM) balance were the undermining factors.

Economic net income was $159.4 million, down 13.4% from the prior-year quarter.

Revenues, AUM & Expenses Down

Total revenues fell 8.7% year over year to $549 million. However, the top line beat the Zacks Consensus Estimate of $542.5 million.

Adjusted earnings before interest, taxes, depreciation and amortization were $206.5 million, down 13.2% from the year-ago quarter.

Total expenses decreased 11.4% to $412.6 million. Lower compensation and related expenses, and selling, general and administrative costs primarily led to the decline.

As of Sep 30, 2019, total AUM was $750.7 billion, down 9.5% year over year. Net outflows of $19.7 billion hurt AUM.

Capital & Liquidity Position Decent

As of Sep 30, 2019, Affiliated Managers had $402.5 million in cash and cash equivalents compared with $565.5 million as of Dec 31, 2018. Notably, the company had $1.79 billion of debt, down 2.1% from the Dec 31, 2018 level.

Shareholders’ equity as of Sep 30, 2019, was $3.07 billion, down from $3.46 billion as of Dec 31, 2018.

Share Repurchase Update

During the third quarter, the company repurchased shares worth $110 million.

Also, Affiliated Managers increased the share repurchase authorization to a total of 8.2 million shares.

Our Take

Affiliated Managers’ muted revenue growth, owing to significant market volatility, remains a major concern. Nevertheless, it is 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. price-consensus-eps-surprise-chart | Affiliated Managers Group, Inc. Quote

Affiliated Managers currently 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 Asset Managers

SEI Investments Co.’s SEIC third-quarter 2019 earnings of 86 cents per share surpassed the Zacks Consensus Estimate of 83 cents. The figure reflects a rise of 7.5% from the prior-year quarter.

Invesco IVZ reported third-quarter 2019 adjusted earnings of 70 cents per share, beating the Zacks Consensus Estimate of 57 cents. Also, the bottom line was 6.1% up from the prior-year quarter figure.

Ameriprise Financial’s AMP third-quarter 2019 adjusted operating earnings per share (excluding unlocking) of $4.24 surpassed the Zacks Consensus Estimate of $3.97. Further, the figure was 8.2% higher than the year-ago quarter.

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