SEI Investments (SEIC) Q4 Earnings Beat Estimates, AUM Up Y/Y

Zacks Equity Research

Thu, Jan 28, 2021, 11:19 AM3 min read

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SEI Investments Co.’s SEIC fourth-quarter 2020 earnings of 86 cents per share surpassed the Zacks Consensus Estimate of 80 cents. Moreover, the figure reflects a rise of 2.4% from the prior-year quarter.

Results for the quarter benefited from growth in revenues, partly offset by higher expenses. Moreover, an increase in assets under management (AUM) balance was a tailwind.

Net income was $125.9 million, down 2.2% from the year-ago quarter.

For 2020, earnings of $3.00 per share surpassed the Zacks Consensus Estimate of $2.94. However, the figure reflects a decline of 7.4% from 2019. Net income was $447.3 million, down 10.8% from the year-ago figure.

Revenues, Expenses & AUM Increase

Total revenues for the quarter were $443.7 million, up 4.8% year over year. The upswing reflects an increase in asset management, administration and distribution fees, and information processing and software servicing fees. The reported figure surpassed the Zacks Consensus Estimate of $437.1 million.

For the year, total revenues were $1.68 billion, up 2.1% year over year. The figure was in line with the Zacks Consensus Estimate.

Total quarterly expenses were $319.7 million, up 4.1% year over year. The rise was due to an increase in almost all cost components except for software royalties and other information processing costs, stock-based compensation costs, and facilities, supplies and other costs.

Operating income rose 6.8% year over year to $124 million.

As of Dec 31, 2020, AUM was $368.7 billion, reflecting a rise of 4.7% from the prior-year quarter. Client assets under administration (AUA) were $786.7 billion, up 15.1% year over year. Client AUA does not include $12.9 billion related to Funds of Funds assets that were reported on Dec 31, 2020.

Share Repurchases

In the reported quarter, SEI Investments bought back 1.8 million shares for $99.1 million.

Our Take

The company’s diversified product offerings are expected to continue boosting financials. Also, rising demand for the SEI Wealth Platform (“SWP”) across several financial institutions will likely support profitability. However, continuously increasing operating expenses (as witnessed in the fourth quarter as well) will likely hurt bottom-line growth to an extent in the near term.

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 Companies

BlackRock, Inc.’s BLK fourth-quarter 2020 adjusted earnings of $10.18 per share surpassed the Zacks Consensus Estimate of $8.84. The figure reflects a rise of 22.1% from the year-ago quarter’s number.

Invesco IVZ reported fourth-quarter 2020 adjusted earnings of 72 cents per share, surpassing the Zacks Consensus Estimate of 57 cents. Also, the bottom line grew 12.5% from the prior-year quarter.

Blackstone’s BX fourth-quarter 2020 distributable earnings of $1.13 per share surpassed the Zacks Consensus Estimate of 93 cents. Moreover, the figure represents a rise of 56.9% from the prior-year quarter.

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