Artisan Partners (APAM) Q3 Earnings Top Estimates, AUM Rises

Artisan Partners Asset Management Inc.’s APAM third-quarter 2021 adjusted net income per adjusted share was $1.33, surpassing the Zacks Consensus Estimate of $1.27. The bottom line soared from 90 cents in the year-ago quarter.

Results were supported by a rise in revenues and higher assets under management (AUM). However, an increase in expenses was an undermining factor.

Net income available to common stockholders (GAAP basis) was $86.4 million or $1.30 per share, up from $58.5 million or 93 cents per share in the prior-year quarter.

Revenues Climb, Expenses Increase

Revenues were $316.6 million, jumping 36% from the year-ago quarter. The rise primarily resulted from a higher average AUM balance. The top line surpassed the Zacks Consensus Estimate of $315.4 million.

Management fees earned from the Artisan Funds & Artisan Global Funds rose 41.9% year over year to $199.1 million. Management fees earned from Separate accounts grew 27.1% to $117.1 million.

Total operating expenses amounted to $173.5 million, up 28% year over year. The rise was primarily due to higher incentive compensation and third-party distribution expenses related to increased revenues as well as an increase in compensation and benefits expenses.

Operating income was $143.1 million, up 47% year over year.

AUM Increases on Net Inflows

As of Sep 30, 2021, AUM was $173.6 billion, up 29% from the year-earlier quarter. The company witnessed net client cash inflows of $4.5 billion and $35.5 billion of investment returns in the third quarter.

The average AUM totaled $177.6 billion, up 36% year over year.

Balance Sheet Position Strong

Cash and cash equivalents were $273.3 million compared with $155 million as of Dec 31, 2020. The company’s debt leverage ratio, calculated in accordance with its loan agreements, was 0.4 as of Sep 30, 2021.

Total stockholders’ equity was $271 million as of Sep 30, 2021, compared with $191 million on Dec 31, 2020.

Our View

Artisan Partners’ diverse investment products are expected to support growth. A rise in AUM, given the inflows, supports top-line expansion. Moreover, prudent cost management will aid profitability to some extent.

Artisan Partners Asset Management Inc. Price, Consensus and EPS Surprise

Artisan Partners Asset Management Inc. Price, Consensus and EPS Surprise

Artisan Partners Asset Management Inc. price-consensus-eps-surprise-chart | Artisan Partners Asset Management Inc. Quote

Currently, Artisan Partners carries a Zacks Rank #4 (Sell).

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Performance of Other Asset Managers

Invesco’s IVZ third-quarter 2021 adjusted earnings of 77 cents per share outpaced the Zacks Consensus Estimate of 73 cents. The bottom line grew 45.3% from the prior-year quarter.

Blackstone’s BX third-quarter 2021 distributable earnings of $1.28 per share comfortably surpassed the Zacks Consensus Estimate of 93 cents. The figure reflects a significant rise from 63 cents recorded in the prior-year quarter.

BlackRock, Inc.’s BLK third-quarter 2021 adjusted earnings of $10.95 per share outpaced the Zacks Consensus Estimate of $9.63. The figure reflects a rise of 18.8% from the year-ago quarter’s number.

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