Affiliated Managers (AMG) Q3 Earnings Beat, AUM Balance Down

Affiliated Managers Group Inc.’s AMG third-quarter 2020 economic earnings of $3.27 per share surpassed the Zacks Consensus Estimate of $2.86. Also, the bottom line grew 3.5% year over year.

The results reflect lower operating expenses and a robust liquidity position. However, lower revenues, fall in assets under management (AUM) balance and decline in adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) were headwinds.

Economic net income was $152.1 million, down 4.6% from the prior-year quarter.

Revenues & AUM Down, Expenses Fall

Total revenues fell 9.9% year over year to $494.8 million. However, the top line beat the Zacks Consensus Estimate of $478.4 million.

Adjusted EBITDA was $181.2 million, down 12.3% from the year-ago quarter.

Total expenses decreased 3.8% to $359.2 million. Decline in compensation and related expenses, and selling, general and administrative costs primarily led to the fall.

As of Sep 30, 2020, total AUM was $653.5 billion, down 12.9% year over year. Net client cash outflows of $14 billion hurt AUM.

Capital & Liquidity Position Decent

As of Sep 30, 2020, Affiliated Managers had $929.4 million in cash and cash equivalents compared with $539.6 million on Dec 31, 2019. The company had $2.3 billion of debt, up 28.8% from the Dec 31, 2019 level.

Shareholders’ equity as of Sep 30, 2020 was $2.8 billion compared with $2.9 billion as of Dec 31, 2019.

Share Repurchase Update

During the third quarter, the company repurchased shares worth $85 million.

Our Take

Affiliated Managers is well positioned for growth on the back of successful partnerships and global distribution capability, along with a diverse product mix. However, muted revenue growth and decline in AUM balance remain major concerns.

Affiliated Managers Group, Inc. Price, Consensus and EPS Surprise

Affiliated Managers Group, Inc. price-consensus-eps-surprise-chart | Affiliated Managers Group, Inc. Quote

Affiliated Managers currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Performance of Other Asset Managers

SEI Investments Co.’s SEIC third-quarter 2020 earnings of 75 cents per share lagged the Zacks Consensus Estimate of 81 cents. Moreover, the figure reflects a decline of 12.8% from the prior-year quarter.

Cohen & Steers’ CNS third-quarter 2020 adjusted earnings of 67 cents per share surpassed the Zacks Consensus Estimate of 60 cents. Moreover, the bottom line was 3.1% higher than the year-ago reported figure.

BlackRock, Inc.’s BLK third-quarter 2020 adjusted earnings of $9.22 per share surpassed the Zacks Consensus Estimate of $7.81. The figure reflects a rise of 29% from the year-ago quarter’s number.

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