Invesco (IVZ) Beats Q3 Earnings As Revenues And AUM Rise
Zacks Investment Research | Oct 26, 2017 08:50AM ET
Invesco Ltd. (NYSE:IVZ) reported third-quarter 2017 adjusted earnings of 71 cents per share, outpacing the Zacks Consensus Estimate of 66 cents. Also, the bottom line came in 18.3% higher than the prior-year quarter.
Results were primarily supported by higher revenues and long-term net inflows. Further, the company reported a rise in assets under management (AUM). However, increase in operating expenses acted as a headwind.
On a GAAP basis, net income attributable to common shareholders came in at $267.5 million or 65 cents per share, up from $241.2 million or 58 cents per share a year ago.
Rise in Revenues More Than Offsets Higher Costs
GAAP operating revenues for the quarter were $1.34 billion, up 11.3% year over year. The figure was marginally above the Zacks Consensus Estimate of $1.33 billion. Adjusted net revenues increased 14.3% year over year to $976.6 million.
Adjusted operating expenses were $579.2 million, up 12.4% from the prior-year quarter. The rise was due to an increase in all expense components.
Adjusted operating margin for the quarter was 40.7% compared with 39.7% a year ago.
Strong AUM
As of Sep 30, 2017, AUM grew 11.9% year over year to $917.5 billion. Average AUM for the reported quarter totaled $890.8 billion, up 9.4% from the year-ago quarter. Further, the reported quarter witnessed long-term net inflows of $6.3 billion.
Our View
Invesco remains well positioned to benefit from improved global investment flows supported by a diversified footprint and product offering. The company is undertaking initiatives to transform key business support functions for boosting efficiency. Also, acquisition of Source and the ETF business of Guggenheim Partners LLC (upon closure) will drive growth.
Invesco PLC Price, Consensus and EPS Surprise
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