Affiliated Managers Group Inc.
) third-quarter 2013 economic net income (ENI) came in at $2.19
per share, which beat the Zacks Consensus Estimate by a nickel.
Moreover, this compared favorably with ENI of $1.91 recorded in
the year-ago quarter.
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Better-than-expected results were aided by top-line growth,
partially offset by higher operating expenses. Further, continued
improvement in asset under management (AUM) and a strong balance
sheet were the tailwinds.
Affiliated Managers' ENI came in at $121.8 million, rising 20.4%
year over year.
Behind the Headlines
Affiliated Managers' total revenue increased 18.0% year over year
to $551.6 million. However, it lagged the Zacks Consensus
Estimate of $554.0 million. Earnings before interest, taxes,
depreciation and amortization (EBITDA) were $170.4 million,
rising 27.6% from $133.5 million in the prior quarter.
Total operating expenses increased 16.8% year over year to $382.5
million. Rise in all operating expense components except for
depreciation and other amortization cost was the primarily reason
for the increase.
Assets under Management
As of Sep 30, 2013, total AUM was $508.4 billion, reflecting net
client cash flow of $10.1 billion. This compared favorably with
$469.5 billion recorded in the prior quarter.
As of Sep 30, 2013, mutual fund AUM was $156.1 billion, up 9.3%
sequentially. Moreover, institutional AUM came in at $267.5
billion, increasing 7.3% sequentially. Further, high net worth
AUM were $65.2 billion, rising 10.0% from the prior quarter.
Capital and Liquidity
As of Sep 30, 2013, Affiliated Managers had $522.4 million in
cash and cash equivalents compared with $413.8 million as of Jun
30, 2013. Moreover, the company had $575.0 million as senior bank
debt at the quarter-end compared with $100.0 million as of Jun
Furthermore, the company had shareholders' equity of $2.0 billion
compared with $2.2 billion as of Jun 30, 2013.
Performance of Other Asset Managers
Ameriprise Financial, Inc.
) reported better-than-expected third-quarter earnings. Results
for these two companies were driven by top-line growth, partially
offset by higher operating expenses.
The Blackstone Group L.P.
) third-quarter economic net income marginally missed the Zacks
Consensus Estimate. Lower-than-expected results were due to a
fall in the top line, partially offset by lower expenses.
Affiliated Managers is expected to benefit from increased
investments in the near term. Moreover, the growing need for risk
management and alternative investment solutions within the
financial service industry will likely be accretive to the
company's financials going forward.
However, a slow economic recovery, high debt levels in Affiliated
Managers' balance sheet and rising expenses are expected to keep
the company's financials under pressure.
Affiliated Managers currently carries a Zacks Rank #2 (Buy).