Affiliated Managers (AMG) Q4 Earnings Top, Revenues Down Y/Y
Affiliated Managers Group Inc.’s AMG fourth-quarter 2023 economic earnings of $6.86 per share handily outpaced the Zacks Consensus Estimate of $6.00. The bottom line, however, declined 7.3% from the prior-year number.
Results were aided by lower expenses and improvement in assets under management (AUM) balance, partially offset by a decline in revenues. Further, the company had a robust liquidity position.
Economic net income was $242.9 million, down 16.3% year over year. Our estimate for this metric was $195.2 million.
For 2023, economic earnings of $19.48 per share handily outpaced the Zacks Consensus Estimate of $18.70 but fell 2.7% year over year. Economic net income was $717.8 million, down 10%. Our estimate for this metric was $670.1 million.
Revenues & Expenses Decline, AUM Rises
Quarterly total revenues declined 6.8% year over year to $502.7 million. Also, the top line missed the Zacks Consensus Estimate of $532 million.
For 2023, total revenues were $2.06 billion, down 11.7%. The top line lagged the consensus estimate of $2.09 billion.
Adjusted EBITDA was $296.2 million, down 21.6% from the year-ago quarter. We projected the metric to be $265.9 million.
Total consolidated expenses decreased 15.1% to $384.1 million. Lower compensation and related expenses and selling, general and administrative charges primarily led to the fall. We had projected total expenses of $368 million.
As of Dec 31, 2023, total AUM was $672.7 billion, which grew 3.4%. Net client cash outflows in the quarter were $6.1 billion in the reported quarter.
Capital & Liquidity Position Decent
As of Dec 31, 2023, Affiliated Managers had $813.6 million in cash and cash equivalents compared with $429.2 million as of Dec 31, 2022. The company had $2.54 billion of debt, relatively stable year over year.
Shareholders’ equity as of Dec 31, 2023, was $3.59 billion compared with $3.23 billion as of Dec 31, 2022.
Share Repurchase Update
During the fourth quarter, Affiliated Managers repurchased shares worth $133 million.
Our Viewpoint
Affiliated Managers remains well-positioned for growth on the back of successful partnerships, global distribution capability and a diverse product mix. However, substantial intangible assets on the company's balance sheet and the tough operating backdrop are major concerns.
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
BlackRock, Inc.’s BLK fourth-quarter 2023 adjusted earnings of $9.66 per share handily surpassed the Zacks Consensus Estimate of $8.84. The figure reflects an increase of 8.2% from the year-ago quarter.
BLK’s quarterly results benefited from a rise in revenues and higher non-operating income. Further, AUM balance witnessed an improvement owing to net inflows. However, higher expenses acted as a dampener.
Invesco’s IVZ fourth-quarter 2023 adjusted earnings of 47 cents per share handily surpassed the Zacks Consensus Estimate of 38 cents. The bottom line grew 20.5% from the prior-year quarter.
Results benefited from an increase in AUM balance on decent inflows. However, a rise in operating expenses and lower revenues were the undermining factors.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
BlackRock, Inc. (BLK) : Free Stock Analysis Report
Invesco Ltd. (IVZ) : Free Stock Analysis Report
Affiliated Managers Group, Inc. (AMG) : Free Stock Analysis Report
