SEI Investments (SEIC) Down 1.8% Despite Q4 Earnings Beat
SEI Investments Co.’s SEIC fourth-quarter 2022 earnings of 83 cents per share outpaced the Zacks Consensus Estimate of 79 cents. The bottom line, however, reflects a decline of 19% from the prior-year quarter.
Results were adversely impacted by “the significant market depreciation,” which hurt SEIC’s revenues and resulted in lower assets under management (AUM) balance. Further, the company recorded a slight rise in expenses during the quarter. Hence, the company’s shares declined 1.8% since the release of fourth-quarter and full-year 2022 results.
Net income was $112.2 million, down 23% from the year-ago quarter.
In 2022, earnings per share of $3.46 declined 9% year over year. Net income fell 13% to $475.5 million.
Revenues & AUM Down, Expenses Rise
Total revenues in the fourth quarter were $456.6 million, down 9% year over year. The fall was due to lower asset management, administration and distribution fees and information processing and software servicing fees. The top line figure was in line with the Zacks Consensus Estimate.
In 2022, total revenues increased 4% to $1.99 billion.
Total expenses were $362.5 million, rising 1%. The rise was mainly due to an increase in compensation, benefits and other personnel costs, data processing and computer-related expenses, and consulting, outsourcing and professional fees.
Operating income plunged 34% year over year to $94 million.
As of Dec 31, 2022, AUM was $399.4 billion, reflecting a decline of 1% from the prior-year quarter. Client assets under administration (AUA) were $814.6 billion, down 11%. Client AUA did not include $12.5 billion related to Funds of Funds assets reported on Dec 31, 2022.
Share Repurchase Update
In the reported quarter, SEI Investments bought back 1.3 million shares for $79.6 million.
Conclusion
Persistently rising expenses are expected to hurt the company’s bottom line to an extent in the near term. SEIC’s increased exposure to fee-based revenues remains another major concern. However, its robust AUM balance, global presence and diverse range of product offerings are expected to continue to drive growth.
SEI Investments Company Price, Consensus and EPS Surprise
SEI Investments Company price-consensus-eps-surprise-chart | SEI Investments Company Quote
Currently, SEI Investments 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 Asset Managers
BlackRock, Inc.’s BLK fourth-quarter 2022 adjusted earnings of $8.93 per share surpassed the Zacks Consensus Estimate of $7.99. The figure reflects a decrease of 16.4% from the year-ago quarter.
The quarterly results benefited from a decline in expenses. However, lower revenues and AUM balance were the major headwinds for BLK.
Invesco’s IVZ fourth-quarter 2022 adjusted earnings of 39 cents per share surpassed the Zacks Consensus Estimate of 36 cents. The bottom line, however, plunged 54.7% from the prior-year quarter. Our estimate for earnings was 33 cents.
Results benefited from a decline in operating expenses. On the other hand, lower AUM balance and long-term outflows hurt IVZ’s revenues.
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