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Moelis & Company (MC) Records Loss in Q2, Expenses Rise

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Moelis & Company MC recorded second-quarter 2020 adjusted loss per share of 11 cents, narrower than the Zacks Consensus Estimate of 14 cents. It reported earnings per share of 56 cents in the prior-year quarter.

Results were primarily hurt by a rise in expenses. However, an increase in revenues and a solid liquidity position were tailwinds.

Net loss (GAAP basis) was $9 million or 10 cents per share against net income of $37.7 million or 54 cents recorded in the prior-year quarter.

Revenues Improve, Expenses Rise

Total revenues increased 4.2% year over year to $159.9 million. The rise reflected an increase in the average fees earned per completed M&A transaction as well as a rise in Capital Markets activity. The top line surpassed the Zacks Consensus Estimate of $138 million.

Total operating expenses (adjusted basis) were $177.1 million, up 53.1% year over year. Increase in compensation and benefits costs led to the rise.

Other expenses (GAAP basis) were $3.3 million against other income of $5 million recorded in the year-ago quarter.

As of Jun 30, 2020, the company had cash and liquid investments of $193.7 million, with no debt or goodwill.

Share Repurchases

During the quarter, Moelis & Company repurchased shares worth $0.8 million.

Our Take

Continuously increasing expenses (as witnessed in the second quarter as well) are expected to hurt the company’s bottom line to an extent. As it expands operations into sectors and products, overall costs are expected to remain elevated.

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 #4 (Sell).

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

Performance of Other Companies

Charles Schwab’s SCHW second-quarter 2020 adjusted earnings of 54 cents per share lagged the Zacks Consensus Estimate of 55 cents. Also, the bottom line decreased 19% from the prior-year quarter.

Interactive Brokers Group’s IBKR second-quarter 2020 adjusted earnings per share of 57 cents surpassed the Zacks Consensus Estimate of 30 cents. The figure reflects no change from the prior-year quarter earnings.

E*TRADE Financial ETFC came up with an earnings surprise of 17.3% in second-quarter 2020 on record daily average revenue trades. Earnings of 88 cents per share outpaced the Zacks Consensus Estimate of 75 cents. The reported figure, however, compared unfavorably with the prior-year quarter’s 90 cents.

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Interactive Brokers Group, Inc. (IBKR) : Free Stock Analysis Report
 
ETRADE Financial Corporation (ETFC) : Free Stock Analysis Report
 
The Charles Schwab Corporation (SCHW) : Free Stock Analysis Report
 
Moelis Company (MC) : Free Stock Analysis Report
 
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