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Federated Hermes, Inc.’s (FHI - Free Report) third-quarter 2024 adjusted earnings per share of $1.06 topped the Zacks Consensus Estimate of 92 cents. The bottom line increased 23.3% from the year-ago quarter.
Find the latest earnings estimates and surprises on the Zacks Earnings Calendar.
An increase in net administrative service fees is a major driving factor. The company’s assets under management (AUM) touched a record level. An increase in revenues and a decline in expenses were added advantage.
Net income (GAAP basis) of $87.5 million rose 17% from the year-ago quarter.
FHI’s Revenues & Operating Expenses
Total revenues increased 1.4% year over year to $408.5 million. The top line surpassed the Zacks Consensus Estimate by 0.5%.
Quarterly net investment advisory fees fell 1% year over year to $274.6 million. Our estimate for the metric was pegged at $273.5 million.
Net other service fees fell 5% year over year to $36.1 million and net administrative service fees rose 11% to $97.7 million. Our estimate for the other service fees and administrative service fees was pegged at $37.5 million and $93.8 million, respectively.
Total operating expenses decreased 1% year over year to $296.7 million. Our expectation for the metric was $312.1 million.
Federated Hermes recorded a net non-operating income of $10.8 million against net non-operating expenses of $0.4 million in the prior-year quarter.
Federated Hermes’ Balance Sheet Position
As of Sept. 30, 2024, cash and other investments and total long-term debt were$565 million and $348 million compared with $560.7 million and $347.8 million, respectively, as of June 30, 2024.
FHI’s Asset Position
As of Sept. 30, 2024, total managed assets were at a record level of $800.5 billion, up 12% year over year. Our estimate for the metric was $771.1 billion.
FHI reported money-market assets of $593 billion, up 13% year over year. Fixed-income assets increased 11.6% to $100.2 billion. Our expectations for money-market and fixed-income assets were $571.8 billion and $95.7 billion, respectively.
Equity assets of $83.6 billion increased 8% from the prior-year quarter. Alternative/private market assets rose 1.7% to $20.7 billion. Our estimates for equity assets and alternative/private market assets were pegged at $80 billion and $20.7 billion, respectively.
Average managed assets totaled $793.5 billion, up 11.6% year over year. Our estimate was pegged at $761.1 billion.
Federated Hermes’ Capital Distribution Update
The company declared a quarterly cash dividend of 31 cents per share, which will be paid out on Nov. 15, 2024, to shareholders of record as of Nov. 8.
The company repurchased 8,18,164 shares of its class B common stock for $26.9 million in the reported quarter.
Our Viewpoint on FHI
Federated Hermes displays substantial growth potential, supported by its diverse asset and product mix, and a solid liquidity position. Though uncertain markets pose a threat, a solid asset under management balance will likely aid its financials.
Federated Hermes, Inc. Price, Consensus and EPS Surprise
BlackRock’s (BLK - Free Report) third-quarter 2024 adjusted earnings of $11.46 per share handily surpassed the Zacks Consensus Estimate of $10.34. The figure reflects growth of 5% from the year-ago quarter.
BLK’s results benefited from a rise in revenues and higher non-operating income. AUM witnessed robust growth and touched the $11.45-trillion mark, driven by net inflows and market appreciation. However, higher expenses acted as headwinds.
Blackstone’s (BX - Free Report) third-quarter 2024 distributable earnings of $1.01 per share outpaced the Zacks Consensus Estimate of 91 cents. The figure reflects a rise of 7% from the prior-year quarter.
BX’s results benefited from higher revenues and an improved AUM balance. However, an increase in GAAP expenses acted as a headwind.
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Federated Hermes Q3 Earnings Beat Estimates, Revenues & AUM Rise Y/Y
Federated Hermes, Inc.’s (FHI - Free Report) third-quarter 2024 adjusted earnings per share of $1.06 topped the Zacks Consensus Estimate of 92 cents. The bottom line increased 23.3% from the year-ago quarter.
Find the latest earnings estimates and surprises on the Zacks Earnings Calendar.
An increase in net administrative service fees is a major driving factor. The company’s assets under management (AUM) touched a record level. An increase in revenues and a decline in expenses were added advantage.
Net income (GAAP basis) of $87.5 million rose 17% from the year-ago quarter.
FHI’s Revenues & Operating Expenses
Total revenues increased 1.4% year over year to $408.5 million. The top line surpassed the Zacks Consensus Estimate by 0.5%.
Quarterly net investment advisory fees fell 1% year over year to $274.6 million. Our estimate for the metric was pegged at $273.5 million.
Net other service fees fell 5% year over year to $36.1 million and net administrative service fees rose 11% to $97.7 million. Our estimate for the other service fees and administrative service fees was pegged at $37.5 million and $93.8 million, respectively.
Total operating expenses decreased 1% year over year to $296.7 million. Our expectation for the metric was $312.1 million.
Federated Hermes recorded a net non-operating income of $10.8 million against net non-operating expenses of $0.4 million in the prior-year quarter.
Federated Hermes’ Balance Sheet Position
As of Sept. 30, 2024, cash and other investments and total long-term debt were$565 million and $348 million compared with $560.7 million and $347.8 million, respectively, as of June 30, 2024.
FHI’s Asset Position
As of Sept. 30, 2024, total managed assets were at a record level of $800.5 billion, up 12% year over year. Our estimate for the metric was $771.1 billion.
FHI reported money-market assets of $593 billion, up 13% year over year. Fixed-income assets increased 11.6% to $100.2 billion. Our expectations for money-market and fixed-income assets were $571.8 billion and $95.7 billion, respectively.
Equity assets of $83.6 billion increased 8% from the prior-year quarter. Alternative/private market assets rose 1.7% to $20.7 billion. Our estimates for equity assets and alternative/private market assets were pegged at $80 billion and $20.7 billion, respectively.
Average managed assets totaled $793.5 billion, up 11.6% year over year. Our estimate was pegged at $761.1 billion.
Federated Hermes’ Capital Distribution Update
The company declared a quarterly cash dividend of 31 cents per share, which will be paid out on Nov. 15, 2024, to shareholders of record as of Nov. 8.
The company repurchased 8,18,164 shares of its class B common stock for $26.9 million in the reported quarter.
Our Viewpoint on FHI
Federated Hermes displays substantial growth potential, supported by its diverse asset and product mix, and a solid liquidity position. Though uncertain markets pose a threat, a solid asset under management balance will likely aid its financials.
Federated Hermes, Inc. Price, Consensus and EPS Surprise
Federated Hermes, Inc. price-consensus-eps-surprise-chart | Federated Hermes, Inc. Quote
Currently, FHI carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Performances of Other Asset Managers
BlackRock’s (BLK - Free Report) third-quarter 2024 adjusted earnings of $11.46 per share handily surpassed the Zacks Consensus Estimate of $10.34. The figure reflects growth of 5% from the year-ago quarter.
BLK’s results benefited from a rise in revenues and higher non-operating income. AUM witnessed robust growth and touched the $11.45-trillion mark, driven by net inflows and market appreciation. However, higher expenses acted as headwinds.
Blackstone’s (BX - Free Report) third-quarter 2024 distributable earnings of $1.01 per share outpaced the Zacks Consensus Estimate of 91 cents. The figure reflects a rise of 7% from the prior-year quarter.
BX’s results benefited from higher revenues and an improved AUM balance. However, an increase in GAAP expenses acted as a headwind.