What's in Store for Affiliated Managers (AMG) in Q3 Earnings?

Affiliated Managers Group Inc. AMG is slated to report third-quarter 2020 results on Oct 26, before the opening bell. Its earnings and revenues are expected to have declined in the quarter on a year-over-year basis.

In the last reported quarter, the company’s earnings surpassed the Zacks Consensus Estimate. Results benefited from lower operating expenses and a robust liquidity position. However, lower revenues, a fall in assets under management (AUM) balance, and a decline in adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) were the undermining factors.

The company boasts an impressive earnings surprise history. Its earnings surpassed the consensus estimate in each of the trailing four quarters, the average beat being 3.7%.

Affiliated Managers Group, Inc. Price and EPS Surprise

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

Earnings & Sales Projections for Q3

Activities of the company in the third quarter encouraged analysts to revise earnings estimates upward. Thus, the Zacks Consensus Estimate for its earnings of $2.86 for the to-be-reported quarter has increased marginally over the past seven days. However, it indicates a decline of 9.5% from the year-ago quarter’s reported figure.

The consensus estimate for sales is pegged at $480.11 million, indicating a fall of 12.6% from the year-ago quarter’s reported number.

Other Key Expectations for Q3

The consensus estimate for the company’s total AUM is pegged at $642 billion, which indicates a marginal rise from the prior quarter’s reported number.

Management expects adjusted EBITDA of $170-$175 million.

Performance fee is anticipated to be seasonally lower at $1-$5 million. Other economic items are anticipated to be $1 million.

On the cost front, interest expenses are expected to be $23 million, suggesting a 4.5% increase from the prior quarter level.

The company’s share of reported amortization and impairments are expected to be $50 million, down 41.9% sequentially.

Earnings Whispers

Now, let’s check what our quantitative model predicts.

According to our quantitative model, chances of Affiliated Managers beating the Zacks Consensus Estimate this time are high. This is because it has the right combination of the two key ingredients — a positive Earnings ESP and a Zacks Rank #3 (Hold) or higher.

You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Earnings ESP: The Earnings ESP for Affiliated Managers is +0.15%.

Zacks Rank: The company currently carries a Zacks Rank #3.

Other Stocks That Warrant a Look

Here are some other finance stocks that you may want to consider, as according to our model, these too have the right combination of elements to post an earnings beat in their upcoming releases.

The Earnings ESP for CullenFrost Bankers, Inc. CFR is +1.57% and the company carries a Zacks Rank of 3 at present. It is slated to report quarterly results on Oct 29. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Invesco Ltd. IVZ is set to release earnings figures on Oct 27. The company, which carries a Zacks Rank of 3 at present, has an Earnings ESP of +2.02%.

The Earnings ESP for Civista Bancshares, Inc. CIVB is +17.71% and the company carries a Zacks Rank #2 (Buy), currently. It is scheduled to report quarterly numbers on Oct 23.

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