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Why Is Cohen & Steers (CNS) Up 5.5% Since Last Earnings Report?

Zacks Equity Research
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It has been about a month since the last earnings report for Cohen & Steers (CNS). Shares have added about 5.5% in that time frame, outperforming the S&P 500.

Will the recent positive trend continue leading up to its next earnings release, or is Cohen & Steers due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.

Cohen & Steers' Q1 Earnings Miss on Lower Revenues

Cohen & Steers’ first-quarter 2019 adjusted earnings came in at 58 cents per share, missing the Zacks Consensus Estimate by a penny. Also, the bottom line was 6.5% lower than the year-ago quarter figure.

Results were adversely impacted by fall in revenues and higher expenses. Nonetheless, improvement in assets under management (AUM) and net inflows acted as tailwinds.

Net income available to common stockholders (GAAP basis) was $32.5 million or 68 cents per share, up from $27.6 million or 59 cents per share in the prior-year quarter.

Revenues Decline, Expenses Rise

Revenues (GAAP basis) came in at $94.2 million, down marginally from the year-ago quarter.  Higher investment advisory and administration fees were almost offset by fall in distribution and service fees, and portfolio consulting and other income.

Total expenses (GAAP basis) amounted to $58.8 million, up 2.7% year over year. The increase was largely due to a rise in employee compensation and benefits expenses.

Operating income (GAAP basis) was $35.4 million, down 4.8% year over year.

Total non-operating income was $14.9 billion against total non-operating loss of $0.2 billion in the prior-year quarter.

AUM Improves on Net Inflows

As of Mar 31, 2019, AUM was $62.6 billion, up nearly 7.1% from the year-earlier quarter. The company witnessed net inflows of $1.03 billion in the quarter against outflows of $95 million a year ago.

Also, average AUM for the reported quarter totaled $59.5 billion, up nearly 1% year over year.

2019 Outlook

Management expects G&A expenses to remain stable at $46 million or decline.

Compensation to revenue ratio is expected to be 35.75%.

Management expects effective tax rate to be 25.25%.

How Have Estimates Been Moving Since Then?

Analysts were quiet during the last two month period as none of them issued any earnings estimate revisions.

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