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Moelis & Company (MC) Beats on Q3 Earnings as Revenues Rise

Zacks Equity Research

Moelis & Company’s MC third-quarter 2019 adjusted earnings of 76 cents per share easily surpassed the Zacks Consensus Estimate of 51 cents. Also, the figure increased 23% year over year.

Results benefited from impressive revenue growth. Also, the company’s liquidity position was strong. However, rise in operating expenses acted as a headwind.

Net income (GAAP basis) was $54.7 million or 73 cents per share, up from $44.9 million or 61 cents recorded in the prior-year quarter.

Revenues & Costs Rise

Total revenues grew 12% year over year to $231.7 million. The rise was primarily driven by higher average fees earned per completed transaction. Also, solid growth in restructuring activity offered some support. Further, the top line surpassed the Zacks Consensus Estimate of $183.8 million.

Total operating expenses (adjusted basis) were $169.3 million, up 10% year over year. Increase in both compensation and benefits costs, and non-compensation expenses led to this rise.

Other income was $5.5 million, up significantly from $1 million recorded in the year-ago quarter.

As of Sep 30, 2019, the company had cash and liquid investments of $161.6 million.

Share Repurchases

During the third quarter, it repurchased nearly 0.1 million shares for $2.5 million.

Our Take

Moelis & Company’s global expansion initiatives along with strategic partnerships in Japan and Mexico are likely to support revenues. However, its hiring trend is likely to lead to a persistent increase in overall costs. Thus, higher expenses might hamper bottom-line growth to an extent.

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 #4 (Sell).

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

Performance of Other Investment Management Stocks

SEI Investments Co.’s SEIC third-quarter 2019 earnings of 86 cents per share surpassed the Zacks Consensus Estimate of 83 cents. The figure reflects a rise of 7.5% from the prior-year quarter.

Invesco IVZ reported third-quarter 2019 adjusted earnings of 70 cents per share, beating the Zacks Consensus Estimate of 57 cents. Also, the bottom line was 6.1% up from the prior-year quarter figure.

Ameriprise Financial’s AMP third-quarter 2019 adjusted operating earnings per share (excluding unlocking) of $4.24 surpassed the Zacks Consensus Estimate of $3.97. Further, the figure was 8.2% higher than the year-ago quarter.

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