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Why is an Earnings Beat Less Likely for Invesco (IVZ) in Q3?
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Invesco (IVZ - Free Report) is slated to announce third-quarter 2022 results on Oct 25, before market open. Its earnings and revenues are expected to have witnessed declines in the to-be-reported quarter on a year-over-year basis.
In the last reported quarter, the company’s adjusted earnings missed the Zacks Consensus Estimate. Results were adversely impacted by a lower assets under management (AUM) balance and long-term outflows. However, a slight decline in expenses was a tailwind.
Invesco does not have an impressive earnings surprise history. Its earnings surpassed the Zacks Consensus Estimate in two and lagged in two of the trailing four quarters, the beat being 3.6%, on average.
The Zacks Consensus Estimate for Invesco’s third-quarter earnings is pegged at 45 cents, which has been revised 2.2% lower over the past seven days. The figure indicates a decline of 41.6% from the year-ago quarter’s reported number. Our estimate for earnings is 49 cents, suggesting a fall of 36.2% from the prior-year quarter’s reported figure.
The consensus estimate for sales is pegged at $1.14 billion, suggesting a year-over-year fall of 14.5%. Our estimate for the same is $1.16 billion, implying a year-over-year decline of 13.3%.
Other Key Estimates & Factors to Note for Q3
Per the monthly metrics data published by Invesco, its preliminary total AUM as of Sep 30, 2022, was $1,323.3 billion, down 4.8% from the Jun 30, 2022 level. In the third quarter, AUM was negatively impacted by unfavorable market returns.
Despite the sequential decline in the AUM balance, the company’s investment management fee is expected to have improved from the previous quarter. The Zacks Consensus Estimate for investment management fee is pegged at $1.14 billion, indicating an increase of 2.6% on a sequential basis. Our estimate for the same is $1.13 billion.
The consensus estimate for performance fees of $8.99 million indicates a decline of 2.3% from the prior quarter. Our estimate for the same is $10.8 million. The consensus estimate for service and distribution fees of $346 million indicates a 2.3% sequential decline. Our estimate for the same is $349 million.
The Zacks Consensus Estimate for other revenues is pegged at $61 million, suggesting a rise of 13% from the prior quarter. Our estimate for other revenues is $54.5 million.
On the cost front, while Invesco’s cost-saving initiatives are likely to have boosted its efficiency, the steady rise in compensation and marketing costs is expected to have had an adverse impact on overall expenses in the quarter.
Management expects interest expenses to decline $5 million in the third quarter of 2022.
What Our Model Predicts
According to our proven model, the chances of Invesco beating the Zacks Consensus Estimate this time are low. This is because it does not have the right combination of the two key ingredients — a positive Earnings ESP and a Zacks Rank #3 (Hold) or better.
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 Invesco is -6.27%.
Zacks Rank: The company currently carries a Zacks Rank #5 (Strong Sell).
Finance Stocks That Warrant a Look
A couple of finance stocks, which you may want to consider as these have the right combination of elements to post an earnings beat in their upcoming releases per our model, are Ameriprise Financial, Inc. (AMP - Free Report) and Ares Management (ARES - Free Report) .
The Earnings ESP for AMP is +0.06%. Ameriprise Financial carries a Zacks Rank #3 at present. It is slated to report quarterly results on Oct 25.
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Why is an Earnings Beat Less Likely for Invesco (IVZ) in Q3?
Invesco (IVZ - Free Report) is slated to announce third-quarter 2022 results on Oct 25, before market open. Its earnings and revenues are expected to have witnessed declines in the to-be-reported quarter on a year-over-year basis.
In the last reported quarter, the company’s adjusted earnings missed the Zacks Consensus Estimate. Results were adversely impacted by a lower assets under management (AUM) balance and long-term outflows. However, a slight decline in expenses was a tailwind.
Invesco does not have an impressive earnings surprise history. Its earnings surpassed the Zacks Consensus Estimate in two and lagged in two of the trailing four quarters, the beat being 3.6%, on average.
Invesco Ltd. Price and EPS Surprise
Invesco Ltd. price-eps-surprise | Invesco Ltd. Quote
The Zacks Consensus Estimate for Invesco’s third-quarter earnings is pegged at 45 cents, which has been revised 2.2% lower over the past seven days. The figure indicates a decline of 41.6% from the year-ago quarter’s reported number. Our estimate for earnings is 49 cents, suggesting a fall of 36.2% from the prior-year quarter’s reported figure.
The consensus estimate for sales is pegged at $1.14 billion, suggesting a year-over-year fall of 14.5%. Our estimate for the same is $1.16 billion, implying a year-over-year decline of 13.3%.
Other Key Estimates & Factors to Note for Q3
Per the monthly metrics data published by Invesco, its preliminary total AUM as of Sep 30, 2022, was $1,323.3 billion, down 4.8% from the Jun 30, 2022 level. In the third quarter, AUM was negatively impacted by unfavorable market returns.
Despite the sequential decline in the AUM balance, the company’s investment management fee is expected to have improved from the previous quarter. The Zacks Consensus Estimate for investment management fee is pegged at $1.14 billion, indicating an increase of 2.6% on a sequential basis. Our estimate for the same is $1.13 billion.
The consensus estimate for performance fees of $8.99 million indicates a decline of 2.3% from the prior quarter. Our estimate for the same is $10.8 million. The consensus estimate for service and distribution fees of $346 million indicates a 2.3% sequential decline. Our estimate for the same is $349 million.
The Zacks Consensus Estimate for other revenues is pegged at $61 million, suggesting a rise of 13% from the prior quarter. Our estimate for other revenues is $54.5 million.
On the cost front, while Invesco’s cost-saving initiatives are likely to have boosted its efficiency, the steady rise in compensation and marketing costs is expected to have had an adverse impact on overall expenses in the quarter.
Management expects interest expenses to decline $5 million in the third quarter of 2022.
What Our Model Predicts
According to our proven model, the chances of Invesco beating the Zacks Consensus Estimate this time are low. This is because it does not have the right combination of the two key ingredients — a positive Earnings ESP and a Zacks Rank #3 (Hold) or better.
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 Invesco is -6.27%.
Zacks Rank: The company currently carries a Zacks Rank #5 (Strong Sell).
Finance Stocks That Warrant a Look
A couple of finance stocks, which you may want to consider as these have the right combination of elements to post an earnings beat in their upcoming releases per our model, are Ameriprise Financial, Inc. (AMP - Free Report) and Ares Management (ARES - Free Report) .
The Earnings ESP for AMP is +0.06%. Ameriprise Financial carries a Zacks Rank #3 at present. It is slated to report quarterly results on Oct 25.
Ares Management is scheduled to release quarterly results on Oct 27. ARES currently carries a Zacks Rank #3 and has an Earnings ESP of +5.04%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.