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Invesco (IVZ) Beats Q1 Earnings Estimates, Hikes Dividend 10%

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Invesco’s (IVZ - Free Report) first-quarter 2021 adjusted earnings of 68 cents per share surpassed the Zacks Consensus Estimate of 62 cents. Also, the bottom line grew 100% from the prior-year quarter.

Shares of Invesco rallied nearly 1.8% in pre-market trading as investors cheered solid quarterly performance.

Results reflect improvement in revenues and solid growth in assets under management (AUM) balance. However, rise in operating expenses was a headwind.

On a GAAP basis, net income attributable to common shareholders was $267.8 million or 58 cents per share, up substantially from $81.5 million or 18 cents per share a year ago.

Revenues & Expenses Rise

GAAP operating revenues were $1.66 billion, which increased 3.8% year over year. Also, the top line beat the Zacks Consensus Estimate of $1.21 billion. Adjusted net revenues grew 9.2% to $1.25 billion.

Adjusted operating expenses were $748 million, up 2% from the prior-year quarter.

Adjusted operating margin was 40.2%, up from 36% a year ago.

As of Mar 31, 2021, cash and cash equivalents were $1.16 billion, down 18% sequentially. Further, long-term debt amounted to $2.08 billion.

AUM Balance Improves

As of Mar 31, 2021, AUM was $1.41 trillion, which surged 33.3% year over year. Average AUM at first-quarter end totaled $1.40 trillion, up 18.6%.

The company witnessed long-term net inflows of $24.5 billion during the quarter.

Dividend Hike

Concurrent with the earnings release, Invesco announced a quarterly cash dividend of 17 cents per share, representing a 10% hike from the prior payout. The dividend will be paid out on Jun 3 to shareholders on record as of May 11.

Our Take

Invesco remains well poised to benefit from its global footprint, product offerings and strategic buyouts. However, elevated expenses and high debt level remain major concerns.

Invesco Ltd. Price, Consensus and EPS Surprise

Invesco Ltd. Price, Consensus and EPS Surprise

Invesco Ltd. price-consensus-eps-surprise-chart | Invesco Ltd. Quote

Currently, Invesco 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

BlackRock, Inc.’s (BLK - Free Report) first-quarter 2021 adjusted earnings of $7.77 per share outpaced the Zacks Consensus Estimate of $7.64. The figure reflects a rise of 17.7% from the year-ago quarter’s number.

Blackstone’s (BX - Free Report) first quarter 2021 distributable earnings of 96 cents per share surpassed the Zacks Consensus Estimate of 72 cents. Moreover, the figure represents a significant rise from 46 cents recorded in the prior-year quarter.

SEI Investments Co.’s (SEIC - Free Report) earnings of 89 cents per share in the first quarter 2021 missed the Zacks Consensus Estimate by a penny. However, the bottom line reflected 24% growth from the prior-year quarter.

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