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Lazard (LAZ) Gains 5.2% as Q2 Earnings Surpass Estimates
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Lazard Inc.’s (LAZ - Free Report) second-quarter 2024 adjusted earnings per share of 52 cents beat the Zacks Consensus Estimate of 40 cents. This compared favorably with earnings of 24 cents in the year-ago quarter.
Results benefited from lower expenses and rise in assets under management (AUM) balances.
The company’s shares moved up 5.2% following the release of its second-quarter 2024 results.
Lazard’s net income (GAAP) was $49.9 million against a loss of $124 million reported in the prior-year quarter.
Revenues Increase
Quarterly operating revenues were $684.6 million, which rose 10.4% year over year. The top line also beat the Zacks Consensus Estimate of $646.5 million.
Expenses Decline
Operating expenses were $621.7 million, down 17% year over year. Our estimate was pegged at $788 million.
The ratio of adjusted compensation expenses to operating revenues was 66%, down from the year-earlier quarter’s 68.4%. The ratio of adjusted non-compensation expenses to operating revenues was 21.7%, down from the year-ago quarter’s 23.2%.
Segmental Performance
Financial Advisory: The segment’s adjusted operating revenues were $407.9 million, rising 19% from the year-earlier quarter’s levels. We had projected the metric to be $351.7 million.
Asset Management: Segmental adjusted operating revenues of $265.2 million dropped 1% from the prior-year quarter’s figure. Our estimate was pinned at $271 million.
Corporate: Adjusted operating revenues from this segment were $11.5 million, up 31% from the year-earlier quarter’s tally. Our estimate was pegged at $13.1 million.
AUM Rises
As of Jun 30, 2024, the total AUM was $244.7 billion, which increased 2.2% from the prior quarter. Our projection for the metric was pinned at $257.9 billion.
The quarter witnessed a market appreciation of $2.5 billion, a foreign exchange depreciation of $1.7 billion and net outflows of $6.6 billion. Our estimate for net outflows was pegged at $3.7 billion.
The average AUM in the reported quarter was $245.3 billion, up 4.2% year over year. Our estimate was $254.2 billion.
Balance Sheet Position Strong
Lazard’s cash and cash equivalents totaled $847.6 million as of Jun 30, 2024, up 21.5% year over year. Stockholders’ equity was $514.2 million, up 23.6% from the previous-year quarter’s levels.
Share Repurchase Update
In the reported quarter, Lazard repurchased 1.1 million shares at an average price of $38.66.
On Jul 24, 2024, the company authorized an additional share repurchase of $200 million, which expires on December 31, 2026, bringing its total outstanding share repurchase authorization to nearly $360 million.
Dividend Update
On Jul 24, 2024, Lazard declared a quarterly dividend of 50 cents on its outstanding common stock. The dividend is payable on Aug 16, 2024, to stockholders of record on Aug 5, 2024.
Our Viewpoint
Lazard is focused on growing organically, evident from its strong AUM balance, along with a quarterly increase in revenues in its second-quarter 2024 results. A strong liquidity position, along with lower expenses, will aid its financials in the upcoming period. However, the operating backdrop and geopolitical concerns are a headwind.
BlackRock, Inc.’s (BLK - Free Report) second-quarter 2024 adjusted earnings of $10.36 handily surpassed the Zacks Consensus Estimate of $9.96. The figure suggests a rise of 12% from the year-ago quarter’s tally.
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 for BLK.
Invesco’s (IVZ - Free Report) second-quarter 2024 adjusted earnings of 43 cents surpassed the Zacks Consensus Estimate of 41 cents. The bottom line increased 38.7% from the prior-year quarter’s tally.
IVZ’s results have been primarily aided by a decline in adjusted expenses. An increase in the assets under management (AUM) balance on decent inflows was a positive. However, marginally lower adjusted revenues hurt results to some extent.
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Lazard (LAZ) Gains 5.2% as Q2 Earnings Surpass Estimates
Lazard Inc.’s (LAZ - Free Report) second-quarter 2024 adjusted earnings per share of 52 cents beat the Zacks Consensus Estimate of 40 cents. This compared favorably with earnings of 24 cents in the year-ago quarter.
Results benefited from lower expenses and rise in assets under management (AUM) balances.
The company’s shares moved up 5.2% following the release of its second-quarter 2024 results.
Lazard’s net income (GAAP) was $49.9 million against a loss of $124 million reported in the prior-year quarter.
Revenues Increase
Quarterly operating revenues were $684.6 million, which rose 10.4% year over year. The top line also beat the Zacks Consensus Estimate of $646.5 million.
Expenses Decline
Operating expenses were $621.7 million, down 17% year over year. Our estimate was pegged at $788 million.
The ratio of adjusted compensation expenses to operating revenues was 66%, down from the year-earlier quarter’s 68.4%. The ratio of adjusted non-compensation expenses to operating revenues was 21.7%, down from the year-ago quarter’s 23.2%.
Segmental Performance
Financial Advisory: The segment’s adjusted operating revenues were $407.9 million, rising 19% from the year-earlier quarter’s levels. We had projected the metric to be $351.7 million.
Asset Management: Segmental adjusted operating revenues of $265.2 million dropped 1% from the prior-year quarter’s figure. Our estimate was pinned at $271 million.
Corporate: Adjusted operating revenues from this segment were $11.5 million, up 31% from the year-earlier quarter’s tally. Our estimate was pegged at $13.1 million.
AUM Rises
As of Jun 30, 2024, the total AUM was $244.7 billion, which increased 2.2% from the prior quarter. Our projection for the metric was pinned at $257.9 billion.
The quarter witnessed a market appreciation of $2.5 billion, a foreign exchange depreciation of $1.7 billion and net outflows of $6.6 billion. Our estimate for net outflows was pegged at $3.7 billion.
The average AUM in the reported quarter was $245.3 billion, up 4.2% year over year. Our estimate was $254.2 billion.
Balance Sheet Position Strong
Lazard’s cash and cash equivalents totaled $847.6 million as of Jun 30, 2024, up 21.5% year over year. Stockholders’ equity was $514.2 million, up 23.6% from the previous-year quarter’s levels.
Share Repurchase Update
In the reported quarter, Lazard repurchased 1.1 million shares at an average price of $38.66.
On Jul 24, 2024, the company authorized an additional share repurchase of $200 million, which expires on December 31, 2026, bringing its total outstanding share repurchase authorization to nearly $360 million.
Dividend Update
On Jul 24, 2024, Lazard declared a quarterly dividend of 50 cents on its outstanding common stock. The dividend is payable on Aug 16, 2024, to stockholders of record on Aug 5, 2024.
Our Viewpoint
Lazard is focused on growing organically, evident from its strong AUM balance, along with a quarterly increase in revenues in its second-quarter 2024 results. A strong liquidity position, along with lower expenses, will aid its financials in the upcoming period. However, the operating backdrop and geopolitical concerns are a headwind.
Lazard, Inc. Price, Consensus and EPS Surprise
Lazard, Inc. price-consensus-eps-surprise-chart | Lazard, Inc. Quote
Currently, Lazard carries a Zacks Rank #4 (Sell). 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) second-quarter 2024 adjusted earnings of $10.36 handily surpassed the Zacks Consensus Estimate of $9.96. The figure suggests a rise of 12% from the year-ago quarter’s tally.
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 for BLK.
Invesco’s (IVZ - Free Report) second-quarter 2024 adjusted earnings of 43 cents surpassed the Zacks Consensus Estimate of 41 cents. The bottom line increased 38.7% from the prior-year quarter’s tally.
IVZ’s results have been primarily aided by a decline in adjusted expenses. An increase in the assets under management (AUM) balance on decent inflows was a positive. However, marginally lower adjusted revenues hurt results to some extent.