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Affiliated Managers Group Inc.’s AMG fourth-quarter 2020 economic earnings of $4.22 per share surpassed the Zacks Consensus Estimate of $3.73. However, the bottom line declined 6.6% year over year.
The company's shares have rallied 3.2% in the pre-market trading.
The results reflect lower operating expenses and a robust liquidity position. However, lower revenues and fall in assets under management (AUM) balance were headwinds.
Economic net income was $191.4 million, down 13.7% from the prior-year quarter.
In 2020, economic earnings per share of $13.36 decreased 6% year over year but beat the consensus estimate of $12.89. Economic net income declined 5.1% to $798.8 million.
Revenues & AUM Down, Expenses Fall
Quarterly total revenues fell marginally year over year to $554.4 million. However, the top line beat the Zacks Consensus Estimate of $522 million.
In 2020, total revenues were $2.03 billion, down 9.5% year over year. The top line outpaced the Zacks Consensus Estimate of $2 billion.
Adjusted EBITDA was $255.2 million, jumping 27.4% from the year-ago quarter.
Total expenses decreased 13.1% to $386.7 million. Decline in intangible amortization and impairments, and selling, general and administrative costs primarily led to the fall.
As of Dec 31, 2020, total AUM was $716.2 billion, down nearly 1% year over year. Net client cash outflows of $15.8 billion during the quarter hurt AUM.
Capital & Liquidity Position Decent
As of Dec 31, 2020, Affiliated Managers had $1.04 billion in cash and cash equivalents compared with $539.6 million on Dec 31, 2019. The company had $2.31 billion of debt, up 28.9% from the Dec 31, 2019 level.
Shareholders’ equity as of Dec 31, 2020 was $2.8 billion compared with $2.9 billion as of Dec 31, 2019.
Share Repurchase Update
During the fourth quarter, the company repurchased shares worth $226 million.
Affiliated Managers is well positioned for growth on the back of successful partnerships and global distribution capability, along with a diverse product mix. However, muted revenue growth and decline in AUM balance remain major concerns.
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 #2 (Buy). 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 fourth-quarter 2020 earnings of 86 cents per share surpassed the Zacks Consensus Estimate of 80 cents. Moreover, the figure reflects a rise of 2.4% from the prior-year quarter.
Artisan Partners Asset Management APAM fourth-quarter 2020 adjusted earnings came in at $1.06 per share, surpassing the Zacks Consensus Estimate of $1.01. However, the bottom line was 41.3% lower than the year-ago quarter figure.
Waddell & Reed Financial Inc.’s WDR fourth-quarter 2020 adjusted earnings of 41 cents per share lagged the Zacks Consensus Estimate of 46 cents. However, the bottom line was above 23 cents reported in the prior-year quarter.
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