Affiliated Managers (AMG) Beats On Q1 Earnings, Costs Rise
Zacks Investment Research | Apr 30, 2017 11:45PM ET
Affiliated Managers Group Inc. (NYSE:AMG) reported first-quarter 2017 economic earnings of $3.21 per share, outpacing the Zacks Consensus Estimate of $3.17. Also, earnings were up 9.9% year over year.
The quarter witnessed strong growth in assets under management (AUM). However, marginally lower revenues along with elevated expenses were the headwinds.
Affiliated Managers’ economic net income (ENI (MI:ENI)) was $183.2 million, an increase of 15% from the prior-year quarter.
Revenues Down, Expenses Rise
Total revenue declined marginally year over year to $544.3 million. Also, the top line missed the Zacks Consensus Estimate of $550.7 million.
Earnings before interest, taxes, depreciation and amortization (EBITDA) were $243.8 million, up 13% from the year-ago quarter.
Total operating expenses increased marginally year over year to $367.7 million. The rise was primarily due to an increase in compensation and related expenses.
As of Mar 31, 2017, total AUM grew 17.4% year over year to $753.5 billion. The quarter witnessed net client cash outflow of $1.3 billion.
Capital Position Deteriorated, Liquidity Position Decent
As of Mar 31, 2017, Affiliated Managers had $293.6 million in cash and cash equivalents compared with $430.8 million as of Dec 31, 2016. Notably, the company had $783.7 million of senior bank debt compared with $868.6 million as of Dec 31, 2016.
Shareholders’ equity as of Mar 31, 2017, totaled $3.58 billion, down from $3.62 billion as of Dec 31, 2016.
Share Repurchases
During the reported quarter, the company repurchased $80 million worth of common stock.
Our Take
Affiliated Managers remains well positioned for future growth based on successful partnerships and global distribution capability, along with a diverse product mix. Also, a strong balance sheet position helped it initiate dividend payments, which should boost investors’ confidence in the stock.
However, we remain concerned about the impact of increased debt levels and higher intangibles on its near-term profitability.
Affiliated Managers Group, Inc. Price, Consensus and EPS Surprise
Zacks Investment Research
Get The News You Want
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.