Affiliated Managers (AMG) Q3 Earnings Beat As Revenues Rise
Zacks Investment Research | Oct 30, 2017 08:54AM ET
Affiliated Managers Group Inc. (NYSE:AMG) reported third-quarter 2017 economic earnings of $3.41 per share, outpacing the Zacks Consensus Estimate of $3.36. Also, earnings were up 12.2% year over year.
Higher revenues and a fall expenses primarily drove earnings. Also, the quarter witnessed solid growth in assets under management (AUM).
Affiliated Managers’ economic net income was $191.3 million, an increase of 15.6% from the prior-year quarter.
Revenues Rise, Expenses Decline
Total revenues grew 7.5% year over year to $585.7 million. However, the top line missed the Zacks Consensus Estimate of $590.4 million.
Earnings before interest, taxes, depreciation and amortization were $256.3 million, up 16.6% from the year-ago quarter.
Total operating expenses dipped 1.8% year over year to $366.9 million. The decline was primarily due to lower selling, general and administrative expenses, and compensation and related expenses.
As of Sep 30, 2017, total AUM grew 19.5% year over year to $803.7 billion. The quarter also witnessed net client cash inflow of $3.1 billion.
Capital Position Deteriorates, Liquidity Position Decent
As of Sep 30, 2017, Affiliated Managers had $374.7 million in cash and cash equivalents compared with $430.8 million as of Dec 31, 2016. Notably, the company had $868.9 million of senior bank debt compared with $868.6 million as of Dec 31, 2016.
Shareholders’ equity as of Sep 30, 2017, totaled $3.63 billion, up from $3.62 billion as of Dec 31, 2016.
Share Repurchases
During the reported quarter, the company repurchased $74 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. 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
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