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AllianceBernstein (AB) Stock Down 2.9% on Q1 Earnings Miss

Zacks Equity Research

Shares of AllianceBernstein AB fell 2.9% after the company reported adjusted earnings of 49 cents per share in first-quarter 2019. The figure missed the Zacks Consensus Estimate of 54 cents. Also, the bottom line compares unfavorably with the year-ago quarter’s reported figure of 73 cents.

Results were adversely impacted by lower revenues and operating margin. However, improvement in total assets under management (AUM) and lower expenses were tailwinds.

Net income available to common stockholders (GAAP basis) was $46.5 million or 49 cents per share, down from $58.2 million or 60 cents per share posted in the prior-year quarter.

Revenues Decline, Expenses Fall

Adjusted net revenues came in at $657.9 million, down 15.9% from the year-ago quarter. This downside mainly resulted from lower performance-based fees, Bernstein Research revenues and investment advisory base fees.

Total operating expenses (GAAP basis) amounted to $627.3 million, down 2.8% year over year. Almost all components of operating expenses decreased except interest on borrowings.

Operating income (GAAP basis) came in at $168.2 million, down 24.5% year over year.

Operating margin (GAAP basis) for the first quarter was 19.9% compared with the prior year’s 23%.

Total AUM Improves

As of Mar 31, 2019, total AUM was $554.7 billion, up nearly 1% from the year-earlier quarter. The company witnessed net inflows of $1.1 billion in the quarter compared to net outflows of $2.4 billion recorded in the prior-year period.

However, average AUM for the reported quarter totaled $539.2 billion, down 3.2% year over year.

Our Take

Growth in AUM and lower expenses will likely support AllianceBernstein in the near term. However, lower revenues remain a concern.

AllianceBernstein Holding L.P. Price, Consensus and EPS Surprise

AllianceBernstein Holding L.P. Price, Consensus and EPS Surprise | AllianceBernstein Holding L.P. Quote

Currently, AllianceBernstein 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 Investment Managers

BlackRock, Inc.’s BLK first-quarter 2019 adjusted earnings of $6.61 per share surpassed the Zacks Consensus Estimate of $6.20. However, the figure came in 1.3% lower than the year-ago quarter’s number.

Blackstone BX reported first-quarter distributable earnings of 44 cents, lagging the Zacks Consensus Estimate of 52 cents. However, the figure reflected improvement from 41 cents earned in the prior-year quarter.

Cohen & Steers’ CNS first-quarter 2019 adjusted earnings came in at 58 cents per share, missing the Zacks Consensus Estimate by a penny. Also, the bottom line came in 6.5% lower than the year-ago quarter’s reported figure.

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