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Affiliated Managers (AMG) Q3 Earnings Beat on Higher Revenues

Affiliated Managers (AMG) records a rise in revenues and expenses in the third quarter of 2021.

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This story originally appeared on Zacks

Affiliated Managers Group Inc.’s AMG third-quarter 2021 economic earnings of $4.00 per share surpassed the Zacks Consensus Estimate of $3.93. The bottom line grew 22.3% year over year.

Results were aided by an improvement in revenues and growth in assets under management (AUM) balance, partly offset by higher expenses. Further, the company had a robust liquidity position.

Economic net income was $168.5 million, up 10.8% from the prior-year quarter.

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Revenues & AUM Improve, Expenses Rise

Total revenues improved 16.2% year over year to $575.2 million. However, the top line lagged the Zacks Consensus Estimate of $599.7 million.

Adjusted EBITDA was $227.7 million, jumping 25.7% from the year-ago quarter.

Total expenses increased 10.1% year over year to $395.3 million. An increase in all cost components, except for intangible amortization and impairment costs, and depreciation and other amortization costs, led to the rise.

As of Sep 30, 2021, total AUM was $747.8 billion, up 14.4% year over year. Net client cash inflows in the quarter were $3.3 billion.

Capital & Liquidity Position Decent

As of Sep 30, 2021, Affiliated Managers had $1.13 billion in cash and cash equivalents compared with $1.04 billion as of Dec 31, 2020. The company had $2.49 billion of debt, which increased 7.8% from the Dec 31, 2020 level.

Shareholders’ equity as of Sep 30, 2021, was $2.64 billion compared with $2.78 billion as of Dec 31, 2020.

Share Repurchase Update

In the reported quarter, the company repurchased shares worth $100 million.

Our Take

In October 2021, Affiliated Managers completed the deal to acquire a majority equity stake in Parnassus Investments, which is expected to increase its ESG-focused AUM balance. Recently, the company announced a partnership deal with Abacus Capital Group, which will likely enhance its participation in private markets.

Affiliated Managers remains well-positioned for growth on the back of successful partnerships and global distribution capability along with a diverse product mix. However, the presence of substantial intangible assets on the company's balance sheet remains a concern.

Affiliated Managers Group, Inc. Price, Consensus and EPS Surprise

 

Affiliated Managers Group, Inc. Price, Consensus and EPS Surprise

Affiliated Managers Group, Inc. price-consensus-eps-surprise-chart | Affiliated Managers Group, Inc. Quote

Affiliated Managers currently carries a Zacks Rank #3 (Hold). 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 third-quarter 2021 adjusted earnings of $10.95 per share outpaced the Zacks Consensus Estimate of $9.63. The figure reflects a rise of 18.8% from the year-ago quarter’s number.

Blackstone’s BX third-quarter 2021 distributable earnings of $1.28 per share comfortably surpassed the Zacks Consensus Estimate of 93 cents. The figure reflects a significant rise from 63 cents recorded in the prior-year quarter.

SEI Investments Co.’s SEIC third-quarter 2021 earnings of 97 cents per share met the Zacks Consensus Estimate. The bottom line reflected 29% growth from the prior-year quarter.



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