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Affiliated Managers (AMG) Q4 Earnings Top Estimates, AUM Down

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Zacks Equity Research
·4 min read
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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.

Our Take

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 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 #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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