Driven by impressive client inflows,
) reported fourth-quarter 2013 adjusted earnings of 58 cents per
share, which beat the Zacks Consensus Estimate by a penny.
Additionally, this was up 38.1% from the prior-year quarter
figure of 42 cents.
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Better-than-expected results were driven by top-line growth,
partially offset by higher expenses. Further, the company's
balance sheet position remained stable and AUM growth was robust.
On a GAAP basis, net income attributable to common shareholders
was $287.4 million or 64 cents per share, up from $158.7 million
or 35 cents in the year-ago quarter.
For full-year 2013, adjusted earnings per share were $2.13, up
29.1% year over year. Further, this surpassed the Zacks Consensus
Estimate of $2.11.
Performance in Details
For 2013, adjusted net revenue grew 14.7% year over year to $3.3
billion. However, it lagged the Zacks Consensus Estimate of $4.7
Adjusted net revenue was $857.3 million, increasing 17.3% from
the prior-year quarter. Growth in all the revenue components led
to the rise. However, it was below the Zacks Consensus Estimate
of $1.2 billion.
Adjusted operating expenses increased 8.0% from the prior-year
quarter to $510.1 million. This was mainly due to rise in
marketing costs, employee compensation expenses as well as
general and administrative expenses.
Adjusted operating margin for the quarter was 40.5%, rising from
35.3% in the year-ago quarter.
As of Dec 31, 2013, AUM increased 16.7% year over year to $778.7
billion. The average AUM for the said quarter was $761.7 billion,
up 15.4% from $660.2 billion in the prior-year quarter. Further,
long-term net inflows fell to $1.0 billion from $2.7 billion on a
As of Dec 31, 2013, cash and cash equivalents were $1,331.2
million, compared with $835.5 million as of Dec 31, 2012. Total
long-term debt was $1,588.6 million as of Dec 31, 2013, against
$1,186.0 million as of Dec 31, 2012.
In Dec 2013, Invesco amended the existing $1.25 billion credit
facility to extend its maturity to Dec 2018.
Capital Deployment Initiatives
In the reported quarter, Invesco repurchased $350.0 million worth
of shares at an average price of $34.64 per share. During 2013,
the company brought back $470.5 million of shares, representing
13.9 million shares at an average price of $33.74.
In Oct 2013, the company authorized an additional $1.5 billion
for the existing share repurchase program with no stated expiry
Performance of Other Asset Managers
) fourth-quarter adjusted earnings significantly surpassed the
Zacks Consensus Estimate. Results benefited from rise in
revenues, partly offset by higher operating expenses.
Among other investment managers,
Legg Mason Inc.
) is scheduled to report December quarter end results on Jan 31
Ameriprise Financial, Inc.
) on Feb 4.
Invesco's long-term investment performance continues to benefit
from improvement in the global equity markets, which are expected
to drive the company's operating results as well. The company is
well positioned to benefit from increased global investment flows
owing to its broad diversification. However, high debt levels and
rising expenses remain concerns.
Currently, Invesco carries a Zacks Rank #2 (Buy).