Affiliated Managers Group Inc.
) fourth-quarter 2013 economic net income (ENI) came in at $3.66
per share, which easily beat the Zacks Consensus Estimate of
$3.09. The reported figure also compared favorably with ENI of
$2.55 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 $202.9 million, rising 49%
year over year.
For full-year 2013, the company reported ENI of $10.31 per share,
substantially above the Zacks Consensus Estimate of $9.74.
Further, ENI compared favorably with $7.71 in the previous year.
Behind the Headlines
Affiliated Managers' total revenue increased 21.0% year over year
to $594.0 million. However, it lagged the Zacks Consensus
Estimate of $637.0 million. Earnings before interest, taxes,
depreciation and amortization (EBITDA) were $301.5 million,
rising 66% from $182.1 million in the year-earlier quarter.
For 2013, total revenue was $2.19 billion, marginally missing the
Zacks Consensus Estimate of $2.23 billion. Nevertheless, revenues
were up 21% on a year-over-year basis.
Total operating expenses climbed 21% year over year to $440.9
million. A rise in all operating expense components except for
depreciation and other amortization costs as well as other
expenses was the primarily reason for the increase.
Assets under Management
As of Dec 31, 2013, total AUM was $537.3 billion, reflecting net
client cash flow of $40.7 billion. This compared favorably with
$431.8 billion as of Dec 31, 2012.
As of Dec 31, 2013, mutual fund AUM was $169.4 billion, up 39%
year over year. Moreover, institutional AUM came in at $300.6
billion, increasing 18% year over year. Further, high net worth
AUM were $67.3 billion, rising 21% from the prior-year quarter.
Capital and Liquidity
As of Dec 31, 2013, Affiliated Managers had $469.6 million in
cash and cash equivalents compared with $430.4 million as of Dec
31, 2012. Moreover, the company had $525.0 million of senior bank
debt at the quarter-end as against $325.0 million as of Dec 30,
Furthermore, the company had shareholders' equity of $2.1
billion, which remained relatively unchanged from Dec 31, 2012.
Performance of Other Asset Managers
Among other asset managers,
The Blackstone Group L.P.
) reported better-than-expected fourth-quarter earnings. Results
benefited from a rise in the top line, partially offset by higher
expenses. Further, all three companies recorded impressive AUM
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).