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Moelis & Company (MC) Beats on Q1 Earnings as Revenues Rise

·3 min read

Moelis & Company’s MC first-quarter 2020 adjusted earnings of 45 cents per share surpassed the Zacks Consensus Estimate of 37 cents. Moreover, the figure was 66.7% higher than the year-ago quarter’s reported number.

Results reflected an increase in revenues and a solid liquidity position. However, a rise in operating expenses acted as a headwind.

Net income (GAAP basis) was $30.1 million or 44 cents per share, up from $16.2 million or 25 cents recorded in the prior-year quarter.

Revenues Improve, Expenses Rise

Total revenues increased 11.6% year over year to $153.7 million. The rise reflected an increase in the number of transaction completions as well as an increase in average fees earned per completed transaction. However, the top line missed the Zacks Consensus Estimate of $160.7 million.

Total operating expenses (adjusted basis) were $129.2 million, up 1.5% year over year. Increase in compensation and benefits costs led to the rise.

Other expenses (GAAP basis) were $1.7 million against other income of $2.1 million recorded in the year-ago quarter.

As of Mar 31, 2020, the company had cash and liquid investments of $145.4 million, with no debt or goodwill.

Share Repurchases

During the quarter, Moelis & Company repurchased 0.9 million shares for $31.6 million.

Our Take

Continuously increasing expenses (as witnessed in the first quarter as well) are expected to hurt Moelis & Company’s bottom line to an extent. As it expands operations into sectors and products, overall costs are expected to remain elevated. Notably, in order to enhance financial flexibility amid the coronavirus-induced slowdown, the company has currently reduced its quarterly dividend.

Moelis & Company Price, Consensus and EPS Surprise

Moelis & Company Price, Consensus and EPS Surprise
Moelis & Company Price, Consensus and EPS Surprise

Moelis & Company price-consensus-eps-surprise-chart | Moelis & Company Quote

Currently, Moelis & Company carries a Zacks Rank #5 (Strong Sell).

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

Performances & Upcoming Release of Other Companies

Charles Schwab’s SCHW first-quarter 2020 adjusted earnings of 62 cents per share lagged the Zacks Consensus Estimate of 64 cents. Also, the bottom line decreased 10% from the prior-year quarter.

Interactive Brokers Group’s IBKR first-quarter 2020 adjusted earnings per share of 69 cents surpassed the Zacks Consensus Estimate of 67 cents. The figure was 25.5% higher than the prior-year earnings.

Raymond James RJF is scheduled to report results on Apr 29.

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Interactive Brokers Group, Inc. (IBKR) : Free Stock Analysis Report
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