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What's in Store for Affiliated Managers (AMG) in Q4 Earnings?

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Affiliated Managers Group Inc. AMG is slated to report fourth-quarter and 2020 results on Feb 8, before the opening bell. Its earnings and revenues in the to-be-reported quarter are expected to have declined on a year-over-year basis.

In the last reported quarter, the company’s earnings surpassed the Zacks Consensus Estimate. Results benefited from lower operating expenses and a robust liquidity position. However, lower revenues, a fall in assets under management (AUM) balance, and a decline in adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) were the undermining factors.

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 7.2%.

Affiliated Managers Group, Inc. Price and EPS Surprise

Affiliated Managers Group, Inc. Price and EPS Surprise
Affiliated Managers Group, Inc. Price and EPS Surprise

Affiliated Managers Group, Inc. price-eps-surprise | Affiliated Managers Group, Inc. Quote

Earnings & Sales Projections for Q4

Activities of the company in the fourth quarter encouraged analysts to revise earnings estimates upward. Thus, the Zacks Consensus Estimate for earnings of $3.73 for the to-be-reported quarter has increased 6% over the past 30 days. However, the estimate indicates a decline of 17.5% from the year-ago quarter’s reported figure.

The consensus estimate for sales is pegged at $522.02 million, indicating a fall of 6% from the year-ago quarter’s reported number.

Other Key Expectations for Q4

The consensus estimate for the company’s total AUM is pegged at $645 billion, which indicates a decline of 1.4% from the prior quarter’s reported number.

Management expects adjusted EBITDA of $200-$230 million.

Performance fee is anticipated to be $20-$50 million. Other economic items are anticipated to be $1 million.

On the cost front, interest expenses are expected to be $27 million, suggesting a 12.5% increase from the prior-quarter level, owing to the hybrid debt issuance in September 2020. Controlling interest depreciation is expected to remain at the third-quarter level of $3 million.

The company’s share of reported amortization and impairments is expected to be $50 million, down 15.3% sequentially.

Earnings Whispers

Now, let’s check what our quantitative model predicts.

According to our quantitative model, it cannot be conclusively predicted whether Affiliated Managers will be able to beat the Zacks Consensus Estimate this time. 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 0.00%.

Zacks Rank: The company currently carries a Zacks Rank #2 (Buy). While this increases the predictive power of ESP, we also need a positive ESP to be confident of an earnings surprise call.

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

Earnings Release Dates of Other Stocks

Among other finance companies, LendingTree, Inc. TREE and Main Street Capital Corporation MAIN are likely to release results around Feb 25, while Ellington Financial LLC EFC is expected to report around Feb 10.

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LendingTree, Inc. (TREE) : Free Stock Analysis Report

Affiliated Managers Group, Inc. (AMG) : Free Stock Analysis Report

Ellington Financial Inc. (EFC) : Free Stock Analysis Report

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