Invesco (IVZ) Q1 Earnings In Line, Revenues & AUM Rise Y/Y
Invesco Ltd. IVZ reported first-quarter 2018 adjusted earnings of 67 cents per share, in line with the Zacks Consensus Estimate. The figure was 9.8% above the prior-year quarter level.
Results were primarily supported by higher revenues and long-term net inflows. Further, the company reported a rise in assets under management (AUM). However, increase in operating expenses was an undermining factor.
On a GAAP basis, net income attributable to common shareholders came in at $253.9 million or 62 cents per share, up from $212 million or 52 cents per share a year ago.
Revenues & Expenses Rise
GAAP operating revenues for the quarter were $1.36 billion, up 13.7% year over year. The figure marginally lagged the Zacks Consensus Estimate of $1.37 billion. Adjusted net revenues increased 10.5% year over year to $958 million.
Adjusted operating expenses were $600.7 million, up 11.1% from the prior-year quarter. The rise was due to an increase in all expense components except employee compensation costs.
Adjusted operating margin for the quarter was 37.3% compared with 37.6% a year ago.
Strong AUM
As of Mar 31, 2018, AUM was $934.2 billion, up 11.9% year over year. Average AUM for the reported quarter totaled $951.3 billion, up 14.6% from the year-ago quarter. Further, the reported quarter witnessed long-term net inflows of $0.3 billion.
Dividend Hike
Concurrent with the earnings release, Invesco announced a quarterly cash dividend of 30 cents per share, representing a hike of 3.4% from the prior payout. The dividend will be paid on Jun 1 to shareholders of record as on May 11.
Our View
Invesco remains well positioned to benefit from improved global investment flows supported by a diversified footprint and product offering. Also, acquisition of Source and the ETF business of Guggenheim Partners LLC will drive growth.
However, high-debt levels of the company might adversely affect its profitability in the long run. Further, amortization of goodwill and intangible assets remains a near-term concern for Invesco.
Invesco Ltd. Price, Consensus and EPS Surprise
Invesco Ltd. Price, Consensus and EPS Surprise | Invesco Ltd. Quote
Currently, Invesco 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 Investment Managers
BlackRock’s BLK first-quarter 2018 adjusted earnings came in at $6.70 per share, which handily outpaced the Zacks Consensus Estimate of $6.42. Results benefited from an improvement in revenues, rise in AUM and steady long-term inflows. However, increase in operating expenses acted as a headwind.
The Blackstone Group L.P. BX reported first-quarter 2018 economic net income of 65 cents per share, which handily surpassed the Zacks Consensus Estimate of 46 cents. The quarter saw an improvement in AUM, mainly driven by inflows. However, lower revenues and a rise in expenses were the undermining factors.
Ameriprise Financial Inc.’s AMP first-quarter 2018 adjusted operating earnings per share of $3.70 comfortably surpassed the Zacks Consensus Estimate of $3.47. Results benefited from an improvement in revenues. Also, growth in AUM and assets under administration supported the earnings. However, a rise in expenses was an undermining factor.
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