Brookfield Asset Management Inc. 's ( BAM ) fourth-quarter
earnings per share came in at 72 cents, which significantly
outpaced the Zacks Consensus Estimate of 30 cents. Yet, this was
16.3% below the earnings of 86 cents recorded in the year-ago
quarter.ALLIANCEBERNSTN (AB): Free Stock Analysis
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Better-than-expected quarterly results were aided by a solid
top-line growth, partially offset by a rise in operating expenses.
Moreover, continued improvement in asset under management (AUM) and
strong balance sheet were the other positives.
Brookfield reported funds from operations (net income prior to
fair value changes, depreciation and amortization, and deferred
income taxes, and includes certain disposition gains that are not
otherwise included in net income as determined under IFRS) of $459
million or 67 cents per share in the quarter. This was higher than
funds from operations of $397 million or 58 cents per share in the
For 2012, net income was $1.4 billion or $1.97 per share, down
from $2.0 billion or $2.89 per share in 2011. Earnings per share
were, however, substantially ahead of the Zacks Consensus Estimate
of $1.37 per share.
Performance in Detail
Total revenue came in at $5.4 billion, surging 30.6% from $4.1
billion in the prior-year quarter. For full year 2012, revenues
were $18.6 billion, up 16.8% year over year.
Brookfield's total return (which includes the company's share of
funds from operations of $459 million and $1.4 billion of valuation
gains, partly offset by $35 million of preferred share dividends)
was recorded at $1.8 billion. This was marginally lower than $1.9
billion in the prior-year quarter
Total expenses inched up 2.6% year over year to $677 million. The
rise was primarily due to a higher interest expenses.
As of Dec 31, 2012, asset under management grew 13.1% year over
year to $181.4 million. Further, Brookfield had $2.8 billion in
cash and cash equivalents, which soared 41.9% from $2.0 billion as
of Dec 31, 2011.
Total assets as of Dec 31, 2012 were $108.6 billion, up 19.4% from
$91.0 billion as of Dec 31, 2011. Moreover, the company had $44.3
billion in total equity at the end of the quarter, up 18.3% from
$37.4 billion as of Dec 31, 2011.
Concurrent with the earnings release, Brookfield announced a
quarterly cash dividend of 15 cents per share, representing nearly
7% hike from the prior dividend. The dividend will be paid on May
31, to stockholders of record as of May 1. The company also
declared all of the regular monthly and quarterly dividends on its
We believe that Brookfield's continuous acquisition activities
along with the growing need for risk management and alternative
investment solutions within the financial service industry will
contribute positively to the company's overall expansion going
forward. Moreover, its sound capital deployment policy will
reinforce investors' confidence. Nevertheless, the persistent
sluggish economic recovery will continue to keep the company's
financials under pressure in the near term.
Currently, Brookfield retains a Zacks Rank #3 (Hold). However,
other asset mangers like AllianceBernstein Holding
L.P. ( AB ),
Lazard Ltd. ( LAZ ) and
Virtus Investment Partners, Inc. ( VRTS ) carry a Zacks
Rank #1 (Strong Buy) and are worth considering.