Affiliated Managers' (AMG) Q4 Earnings Beat, Revenues Fall
Zacks Investment Research | Feb 02, 2020 08:57PM ET
Affiliated Managers Group Inc.’s (NYSE:AMG) fourth-quarter 2019 economic earnings of $4.52 per share surpassed the Zacks Consensus Estimate of $4.03. Also, the bottom line grew 28% year over year.
Results benefited from higher adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) and robust liquidity position. However, lower revenues, fall in assets under management (AUM) balance and rise in expenses were the undermining factors.
Economic net income was $221.8 million, up 19.4% from the prior-year quarter.
In 2019, economic earnings were $14.22 per share, down 1.9% year over year. However, the figure beat the consensus estimate of $13.77. Economic net income declined 7.7% to $720.2 million.
Revenues & AUM Down, Expenses Rise
Total revenues for the quarter fell 1.6% year over year to $555.5 million. However, the top line beat the Zacks Consensus Estimate of $537.6 million.
In 2019, total revenues were $2.34 billion, down 5.8%. The figure outpaced the consensus estimate of $2.22 billion.
Adjusted EBITDA was $200.3 million, up 4.7% from the year-ago quarter.
Total expenses increased 4.1% to $445 million. Rise in compensation and related expenses, and intangible amortization and impairments primarily led to the increase.
As of Dec 31, 2019, total AUM was $722.5 billion, down 1.8% year over year. Net outflows of $11.3 billion hurt AUM.
Capital & Liquidity Position Decent
As of Dec 31, 2019, Affiliated Managers had $539.6 million in cash and cash equivalents compared with $565.5 million as of Dec 31, 2018. The company had $1.79 billion of debt, down 2% from the Dec 31, 2018 level.
Shareholders’ equity as of Dec 31, 2019, was $2.94 billion, down from $3.46 billion as of Dec 31, 2018.
Share Repurchase Update
During the fourth quarter, the company repurchased shares worth $110 million.
Our Take
Affiliated Managers’ muted revenue growth remains a major concern. Nevertheless, it is well positioned for growth, based on successful partnerships and global distribution capability along with a diverse product mix.
Affiliated Managers Group, Inc. Price, Consensus and EPS Surprise
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