Eaton Vance (EV) Q3 Earnings Beat Estimates, Stock Down 1.5%
Eaton Vance Corp.’s EV third-quarter fiscal 2018 (ended Jul 31) adjusted earnings of 82 cents per share surpassed the Zacks Consensus Estimate of 81 cents. Also, the bottom line was 32% higher than the prior-year quarter’s tally.
Higher revenues and growth in assets under management (AUM) on a year-over-year basis supported the results. Further, the company’s liquidity position remained strong. However, rise in operating expenses was a headwind. Probably due to this negative aspect shares of the company have declined 1.5% following the release.
Net income attributable to shareholders (GAAP basis) was $101.8 million or 83 cents per share, up from $67.4 million or 58 cents per share in the year-ago quarter.
Revenues Rise, Expenses Flare Up
Total revenues were $430.6 million, up 9% year over year. This upside was primarily driven by higher management fees and other revenues. However, the top line marginally lagged the Zacks Consensus Estimate of $430.8 million.
Total expenses increased 6% from the prior-year quarter to $288.3 million, largely due to higher compensation and related costs, fund-related expenses, amortization of deferred sales commissions, and other expenses.
Total operating income grew 18% year over year to $142.3 million.
Liquidity Position Strong, AUM Improves
As of Jul 31, 2018, Eaton Vance had $562.9 million in cash and cash equivalents compared with $610.6 million as of Oct 31, 2017. Further, the company had no borrowings outstanding against its $300-million credit facility.
Eaton Vance’s consolidated AUM increased 12% from the year-ago quarter to $453.2 billion, reflecting net inflows of $23.2 billion and a market price appreciation of $24.4 billion.
Share Repurchase
During the first nine months of fiscal 2018, Eaton Vance repurchased nearly 3.4 million shares of its Non-Voting Common Stock for $186.1 million under the company’s existing repurchase authorization.
Our Viewpoint
Eaton Vance’s improving AUM, along with revenue rise, will likely support its growth in the quarters ahead. However, escalating expenses remain a major headwind.
Eaton Vance Corporation Price, Consensus and EPS Surprise
Eaton Vance Corporation Price, Consensus and EPS Surprise | Eaton Vance Corporation Quote
Currently, Eaton Vance 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 Investment Managers
BlackRock’s BLK second-quarter 2018 adjusted earnings of $6.66 per share outpaced the Zacks Consensus Estimate of $6.60. Results benefited from an improvement in revenues, rise in assets under management and steady long-term inflows. However, an increase in operating expenses acted as a headwind.
The Blackstone Group L.P. BX reported second-quarter 2018 economic net income (ENI) of 90 cents per share, which handily outpaced the Zacks Consensus Estimate of 71 cents. The quarter saw a substantial jump in revenues and growth in assets under management, which were mainly driven by inflows. However, rise in expenses was the undermining factor.
Ameriprise Financial Inc.’s AMP second-quarter 2018 adjusted operating earnings per share of $3.60 comfortably surpassed the Zacks Consensus Estimate of $3.51. Results benefited from an improvement in revenues. Growth in AUM and assets under administration (AUA) also supported earnings. However, rise in expenses was an undermining factor.
Best Electric Car Stock? You'll Never Guess It.
Zacks Research has released a report that may shock many investors. One stock stands out as the best way to invest in the surge to electric cars. And it's not the one you may think!
Much like petroleum 150 years ago, lithium battery power is set to shake the world, creating millionaires and reshaping geo-politics. Soon electric vehicles (EVs) may be cheaper than gas guzzlers. Some are already reaching 265 miles on a single charge. With battery prices plummeting and charging stations set to multiply, revenues that were already at $31 billion in 2016 are expected to blast to over $67 billion by the end of 2022.
See Zacks Best EV Stock Free >>
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
Ameriprise Financial, Inc. (AMP) : Free Stock Analysis Report
BlackRock, Inc. (BLK) : Free Stock Analysis Report
Eaton Vance Corporation (EV) : Free Stock Analysis Report
The Blackstone Group L.P. (BX) : Free Stock Analysis Report
To read this article on Zacks.com click here.
