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Invesco (IVZ) Dips on Q1 Earnings Miss, Y/Y Revenue Decline
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Invesco’s (IVZ - Free Report) first-quarter 2024 adjusted earnings of 33 cents per share lagged the Zacks Consensus Estimate of 40 cents. The bottom line declined 13.2% from the prior-year quarter.
Shares of Invesco lost 1.2% in the pre-market trading on persistent top-line weakness. However, a full day’s trading session will depict a clearer picture.
Results were primarily hurt by a decline in adjusted revenues, along with higher adjusted expenses. However, an increase in the assets under management (AUM) balance on decent inflows was a positive.
On a GAAP basis, net income attributable to common shareholders was $141.5 million or 31 cents per share compared with $145 million or 32 cents per share a year ago. Our estimate for the metric was $137.4 million.
Adjusted Revenues Decline, Expenses Rise
Adjusted net revenues were $1.05 billion, falling 2.1% year over year. The top line lagged the Zacks Consensus Estimate of $1.08 billion.
Adjusted operating expenses were $756.7 million, up 1% on a year-over-year basis. We expected the metric to be $779.3 million.
The adjusted operating margin was 28.2%, down from 30.4% a year ago.
AUM Balance Increases
As of Mar 31, 2024, AUM was $1.66 trillion, which increased 12.1% year over year. Average AUM at the first-quarter end totaled $1.61 trillion, up 10.3%.
The company witnessed long-term net inflows of $6.3 billion in the reported quarter.
Balance Sheet Strong
As of Mar 31, 2024, cash and cash equivalents were $895.7 million compared with $1.47 billion as of Dec 31, 2023.
The long-term debt was $1.26 billion.
Dividend Hike
Concurrent to the earnings release, the company announced a quarterly cash dividend of 20.5 cents per share, representing a hike of 2.5% from the prior payout. The dividend will be paid out on Jun 4 to shareholders of record as of May 14.
Our View
Invesco is well-poised to benefit from its global footprint, product offerings and strategic buyouts. However, elevated expenses, a challenging market environment and high debt levels are major near-term concerns.
BlackRock, Inc.’s (BLK - Free Report) first-quarter 2024 adjusted earnings of $9.81 per share handily surpassed the Zacks Consensus Estimate of $9.42. The figure reflects a jump of 24% from the year-ago quarter.
BLK’s results benefited from a rise in revenues and higher non-operating income. Further, the AUM balance witnessed an improvement, driven by net inflows. However, higher expenses acted as a dampener.
Blackstone’s (BX - Free Report) first-quarter 2024 distributable earnings of 98 cents per share were in line with the Zacks Consensus Estimate. The figure reflects a rise of 1% from the prior-year quarter.
BX’s results benefited from a rise in segment revenues and an improvement in the AUM balance. However, higher GAAP expenses hurt the results to some extent.
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Invesco (IVZ) Dips on Q1 Earnings Miss, Y/Y Revenue Decline
Invesco’s (IVZ - Free Report) first-quarter 2024 adjusted earnings of 33 cents per share lagged the Zacks Consensus Estimate of 40 cents. The bottom line declined 13.2% from the prior-year quarter.
Shares of Invesco lost 1.2% in the pre-market trading on persistent top-line weakness. However, a full day’s trading session will depict a clearer picture.
Results were primarily hurt by a decline in adjusted revenues, along with higher adjusted expenses. However, an increase in the assets under management (AUM) balance on decent inflows was a positive.
On a GAAP basis, net income attributable to common shareholders was $141.5 million or 31 cents per share compared with $145 million or 32 cents per share a year ago. Our estimate for the metric was $137.4 million.
Adjusted Revenues Decline, Expenses Rise
Adjusted net revenues were $1.05 billion, falling 2.1% year over year. The top line lagged the Zacks Consensus Estimate of $1.08 billion.
Adjusted operating expenses were $756.7 million, up 1% on a year-over-year basis. We expected the metric to be $779.3 million.
The adjusted operating margin was 28.2%, down from 30.4% a year ago.
AUM Balance Increases
As of Mar 31, 2024, AUM was $1.66 trillion, which increased 12.1% year over year. Average AUM at the first-quarter end totaled $1.61 trillion, up 10.3%.
The company witnessed long-term net inflows of $6.3 billion in the reported quarter.
Balance Sheet Strong
As of Mar 31, 2024, cash and cash equivalents were $895.7 million compared with $1.47 billion as of Dec 31, 2023.
The long-term debt was $1.26 billion.
Dividend Hike
Concurrent to the earnings release, the company announced a quarterly cash dividend of 20.5 cents per share, representing a hike of 2.5% from the prior payout. The dividend will be paid out on Jun 4 to shareholders of record as of May 14.
Our View
Invesco is well-poised to benefit from its global footprint, product offerings and strategic buyouts. However, elevated expenses, a challenging market environment and high debt levels are major near-term concerns.
Invesco Ltd. Price, Consensus and EPS Surprise
Invesco Ltd. price-consensus-eps-surprise-chart | Invesco Ltd. Quote
Currently, IVZ carries a Zacks Rank #2 (Buy). 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 2024 adjusted earnings of $9.81 per share handily surpassed the Zacks Consensus Estimate of $9.42. The figure reflects a jump of 24% from the year-ago quarter.
BLK’s results benefited from a rise in revenues and higher non-operating income. Further, the AUM balance witnessed an improvement, driven by net inflows. However, higher expenses acted as a dampener.
Blackstone’s (BX - Free Report) first-quarter 2024 distributable earnings of 98 cents per share were in line with the Zacks Consensus Estimate. The figure reflects a rise of 1% from the prior-year quarter.
BX’s results benefited from a rise in segment revenues and an improvement in the AUM balance. However, higher GAAP expenses hurt the results to some extent.