What's in Store for Affiliated Managers (AMG) in Q3 Earnings?
Affiliated Managers Group Inc. AMG is slated to report third-quarter 2023 results on Nov 6, before the opening bell. Its earnings and revenues are expected to have declined in the quarter on a year-over-year basis.
In the last reported quarter, the company’s earnings outpaced the Zacks Consensus Estimate. Results benefited from lower expenses, partly offset by a decline in the assets under management (AUM) balance and revenues.
The company boasts an impressive earnings surprise history. Its earnings surpassed the consensus estimate in each of the trailing four quarters, the average beat being 4.2%.
Affiliated Managers Group, Inc. Price and EPS Surprise
Affiliated Managers Group, Inc. price-eps-surprise | Affiliated Managers Group, Inc. Quote
The Zacks Consensus Estimate for AMG’s third-quarter earnings is pegged at $3.78, which has been unchanged over the past seven days. The figure indicates a 10.2% decline from the year-ago quarter’s reported number. Our estimate for economic earnings per share is pinned at $3.81.
The company expects economic net income (controlling interest) of $139-146 million. Economic earnings per share are expected between $3.75 and $3.95.
The consensus estimate for sales is pegged at $514.7 million, indicating an 11% year-over-year fall. Our estimate for total revenues is pinned at $520.3 million.
Other Key Expectations for Q3
Management expects adjusted EBITDA of $190-$200 million, including net performance fee earnings of up to $10 million. Our estimate for adjusted EBITDA is $195.2 million.
The company expects interest expenses of $31 million, around the same level as that reported in the second quarter of 2023. We expect interest expenses of $31.6 million.
Controlling interest depreciation is expected to be at the second-quarter reported level of $2 million.
Net income (controlling interest) is expected between $93 million and $101 million. The company’s share of reported amortization and impairments is expected to be $29 million. Our estimate for the metric is $29.4 million.
Intangible-related deferred taxes are projected to be $15 million. Our estimate for the metric is $15.3 million.
Other economic items, which include realized gains, are anticipated to be $2 million.
Key Developments in the Quarter
In August, Affiliated Managers completed the acquisition of a minority equity interest in Forbion Group Holding B.V. The terms of the deal, announced in June, were not disclosed.
Being a venture capital and growth equity firm with €3 billion in AUM, Forbion focuses on investing in high-quality life science companies across all stages of their development. It provides capital and expertise to life science companies, enabling the development of therapeutics that can impact the future of medicine.
In July, AMG announced an agreement that would see Pathstone Family Office, LLC acquire 100% of the outstanding equity interests in Veritable, LP. The transaction, slated for closure in the second half of 2023, is subject to customary closing conditions.
The partnership between Affiliated Managers and Veritable has been spanning for more than 11 years. As of May 31, 2023, Veritable managed approximately $17 billion in client assets.
AMG expects to utilize the gross cash proceeds of $294 million for debt repayment, funding growth initiatives and share repurchases. This demonstrates a strategic allocation of resources that will likely pave the way for sustained expansion and enhanced shareholder value.
Earnings Whispers
According to our quantitative model, the chances of Affiliated Managers beating the Zacks Consensus Estimate this time are low. This is because it does not have the right combination of the two key ingredients — a positive Earnings ESP and a Zacks Rank #3 (Hold) or higher.
You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Earnings ESP: The Earnings ESP for Affiliated Managers is -0.22%.
Zacks Rank: The company currently carries a Zacks Rank #3. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.
Performance of Investment Managers
SEI Investments Co.’s SEIC third-quarter 2023 earnings of 87 cents per share met the Zacks Consensus Estimate. The bottom line reflects a rise of 93% from the prior-year quarter.
SEIC’s results benefited from higher revenues and an increase in the AUM balance. Lower expenses acted as another tailwind for SEIC.
BlackRock, Inc.’s BLK third-quarter 2023 adjusted earnings of $10.91 per share handily surpassed the Zacks Consensus Estimate of $8.52 per share. Also, the figure increased 14.2% from the year-ago quarter.
BLK’s results benefited from a rise in revenues and higher non-operating income. Further, the AUM balance witnessed improvement. However, higher expenses acted as a headwind for BLK.
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