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Artisan Partners (APAM) Q2 Earnings Miss Estimates on Lower AUM
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Artisan Partners Asset Management Inc. (APAM - Free Report) reported second-quarter 2024 adjusted net income per adjusted share of 82 cents, missing the Zacks Consensus Estimate of 87 cents. The bottom line, however, increased 15% from the prior-year quarter.
Results were adversely affected by the declining assets under management (AUM) balance, along with the rising operating costs. Nonetheless, an increase in Global Funds and Separate accounts resulted in top-line growth. Also, the balance sheet position improved in the reported quarter.
Results in the reported quarter excluded certain notable items. After considering these, net income available to common shareholders (GAAP basis) was $57.6 million or 80 cents per share, up from $53.6 million or 76 cents per share reported in the prior-year quarter.
Revenues & Expenses Rise
Second-quarter revenues were $270.8 million, which rose 11.5% year over year. Also, the top line surpassed the Zacks Consensus Estimate of $269.9 million.
Management fees earned from Artisan Funds & Artisan Global Funds increased 12.3% year over year to $170.2 million. Management fees earned from Separate accounts grew 10.1% to $100.5 million.
Total operating expenses were $184.2 million, up 10.8% year over year. The rise was due to an increase in all components of operating expenses.
Operating income was $86.6 million, up 12.9% year over year.
AUM Balance Declines
As of Jun 30, 2024, the ending AUM was $158.9 billion, down nearly 1% from the previous quarter due to a rise in net client cash outflows and non-reinvestment of Artisan Funds' distributions, partially offset by market appreciation.
The average AUM totaled $158.6 billion, up 2.9% from the prior quarter.
Balance Sheet Position Improves
Cash and cash equivalents were $195.4 million compared with $141 million as of Dec 31, 2023. Artisan Partners’ debt leverage ratio, calculated in accordance with its loan agreements, was 0.5X as of Jun 30, 2024.
Dividend Update
The company’s board of directors declared a variable second-quarter dividend of 71 cents per share of Class A common stock. The amount will be paid out on Aug 30 to shareholders of record as of Aug 16, 2024.
Our Take
A challenging operating backdrop and geopolitical concerns might affect the company’s AUM in the upcoming period. A volatile trend in net outflows over the past years keeps us apprehensive.
Nonetheless, a decent liquidity position is expected to support financials. Also, diverse investment strategies across multiple asset classes and investments in new teams and operational capabilities are likely to drive revenues in the upcoming period.
Artisan Partners Asset Management Inc. Price, Consensus and EPS Surprise
BlackRock’s (BLK - Free Report) second-quarter 2024 adjusted earnings of $10.36 per share handily surpassed the Zacks Consensus Estimate of $9.96. The figure reflects a rise of 12% from the year-ago quarter.
BLK's results benefited from a rise in revenues. AUM witnessed solid improvement driven by net inflows and market appreciation. However, higher expenses and a fall in non-operating income acted as headwinds.
Invesco’s (IVZ - Free Report) second-quarter 2024 adjusted earnings of 43 cents per share surpassed the Zacks Consensus Estimate of 41 cents. The bottom line increased 38.7% from the prior-year quarter.
IVZ's results have been primarily aided by a decline in adjusted expenses. An increase in the AUM balance on decent inflows was a positive. However, marginally lower adjusted revenues hurt results to some extent.
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Artisan Partners (APAM) Q2 Earnings Miss Estimates on Lower AUM
Artisan Partners Asset Management Inc. (APAM - Free Report) reported second-quarter 2024 adjusted net income per adjusted share of 82 cents, missing the Zacks Consensus Estimate of 87 cents. The bottom line, however, increased 15% from the prior-year quarter.
Results were adversely affected by the declining assets under management (AUM) balance, along with the rising operating costs. Nonetheless, an increase in Global Funds and Separate accounts resulted in top-line growth. Also, the balance sheet position improved in the reported quarter.
Results in the reported quarter excluded certain notable items. After considering these, net income available to common shareholders (GAAP basis) was $57.6 million or 80 cents per share, up from $53.6 million or 76 cents per share reported in the prior-year quarter.
Revenues & Expenses Rise
Second-quarter revenues were $270.8 million, which rose 11.5% year over year. Also, the top line surpassed the Zacks Consensus Estimate of $269.9 million.
Management fees earned from Artisan Funds & Artisan Global Funds increased 12.3% year over year to $170.2 million. Management fees earned from Separate accounts grew 10.1% to $100.5 million.
Total operating expenses were $184.2 million, up 10.8% year over year. The rise was due to an increase in all components of operating expenses.
Operating income was $86.6 million, up 12.9% year over year.
AUM Balance Declines
As of Jun 30, 2024, the ending AUM was $158.9 billion, down nearly 1% from the previous quarter due to a rise in net client cash outflows and non-reinvestment of Artisan Funds' distributions, partially offset by market appreciation.
The average AUM totaled $158.6 billion, up 2.9% from the prior quarter.
Balance Sheet Position Improves
Cash and cash equivalents were $195.4 million compared with $141 million as of Dec 31, 2023. Artisan Partners’ debt leverage ratio, calculated in accordance with its loan agreements, was 0.5X as of Jun 30, 2024.
Dividend Update
The company’s board of directors declared a variable second-quarter dividend of 71 cents per share of Class A common stock. The amount will be paid out on Aug 30 to shareholders of record as of Aug 16, 2024.
Our Take
A challenging operating backdrop and geopolitical concerns might affect the company’s AUM in the upcoming period. A volatile trend in net outflows over the past years keeps us apprehensive.
Nonetheless, a decent liquidity position is expected to support financials. Also, diverse investment strategies across multiple asset classes and investments in new teams and operational capabilities are likely to drive revenues in the upcoming period.
Artisan Partners Asset Management Inc. Price, Consensus and EPS Surprise
Artisan Partners Asset Management Inc. price-consensus-eps-surprise-chart | Artisan Partners Asset Management Inc. Quote
Currently, Artisan Partners 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’s (BLK - Free Report) second-quarter 2024 adjusted earnings of $10.36 per share handily surpassed the Zacks Consensus Estimate of $9.96. The figure reflects a rise of 12% from the year-ago quarter.
BLK's results benefited from a rise in revenues. AUM witnessed solid improvement driven by net inflows and market appreciation. However, higher expenses and a fall in non-operating income acted as headwinds.
Invesco’s (IVZ - Free Report) second-quarter 2024 adjusted earnings of 43 cents per share surpassed the Zacks Consensus Estimate of 41 cents. The bottom line increased 38.7% from the prior-year quarter.
IVZ's results have been primarily aided by a decline in adjusted expenses. An increase in the AUM balance on decent inflows was a positive. However, marginally lower adjusted revenues hurt results to some extent.