) gained 2.8% as it reported yet another impressive quarter with
adjusted earnings of 64 cents per share in second-quarter 2014,
outpacing the Zacks Consensus Estimate of 55 cents. With
this, the company managed to keep its surprise streak alive,
marking five straight quarters of earnings beat. Also, the reported
figure compared favorably with 45 cents earned in the prior-year
Results were driven by strong top-line performance, partially
offset by elevated expenses. Apart from a strong performance in the
asset management segment, Lazard benefited from the favorable
market backdrop that witnessed a significant number of mergers and
Adjusted net income in the reported quarter came in at $85.4
million, up 42.6% year over year.
After considering certain non-recurring items, second-quarter
2014 net income came in at $85.2 million or 64 cents per share
compared with $31.4 million or 24 cents per share in the prior-year
Quarter in Detail
In the reported quarter, adjusted operating revenues came in at
$571.0 million, up 12% year over year. The rise was mainly
attributable to increase in both asset management fees and
financial advisory revenues. Moreover, revenues surpassed the Zacks
Consensus Estimate of $540.0 million.
Adjusted operating expenses were $447.4 million, up 9% year over
year. The upsurge stemmed from higher compensation and benefits
expenses as well as elevated non-compensation expenses.
Adjusted compensation and benefits expense increased 9% year over
year to $335.9 million. Adjusted non-compensation expense for the
first quarter was $111.5 million, up 6% year over year. The
ratio of compensation expense to operating revenue was 58.8%
compared with 60.0% in the prior-year quarter The ratio of
non-compensation expense to operating revenue was 19.5% compared
with 20.5% in the prior-year quarter.
For 2014, the company targets an adjusted non-compensation
expense-to-revenue ratio between 16% and 20%, while adjusted
compensation ratio to be in the mid-to high-50s percentage range.
: The segment's total revenue was $280.8 million, up 7% from the
prior-year quarter. The rise was primarily due to increase in
revenues from M&A and other advisory, capital raising,
partially offset by decreased restructuring revenues.
: The segment's total revenue was $285.7 million, up 18% from the
prior-year quarter. The rise was driven by increase in management
fees and other revenues.
: The segment generated total revenue of $4.6 million, down 8% year
Assets Under Management
As of Jun 30, 2014, AUM was recorded at $204.5 billion, up 25% year
over year. The company recorded net inflows of $4.7 billion.
Average AUM, came in at $198.5 billion, up 18% year over year.
Lazard boasts a healthy and low-risk financial position with
roughly $684.5 million in cash and cash equivalents as of Jun 30,
2014, compared with $841.5 million as of Dec 31, 2013. Total
stockholders' equity was $566.7 million compared with $630.0
million as of Dec 31, 2013.
During the quarter, Lazard returned $124 million to shareholders.
This included share repurchase of Class A common stock worth $86
million, dividend payment of $37 million, along with $1 million
paid for meeting employee tax obligations in exchange of share
issuances upon vesting of equity grants.
Results reflect the company's consistent efforts in achieving
growth and profitability. Though the sluggish macroeconomic
environment and stringent regulations might put the company's
financials under pressure in the near term, we believe that the
company's diverse footprint and cost containment initiatives
position it favorably in the long run.
Lazard currently sports a Zacks Rank #1 (Strong Buy).
Performance of Other Investment Managers
Top-line growth aided by an increase in AUM drove BlackRock, Inc.'s
) second-quarter adjusted earnings of $4.89 per share. It surpassed
the Zacks Consensus Estimate of $4.46 for the third consecutive
Impressive performance fees drove
The Blackstone Group L.P.'s (
) second-quarter 2014 economic net income (ENI) of $1.15 per share,
which outpaced the Zacks Consensus Estimate by 64%. Also, the
figure was up 85% from 62 cents earned in the prior-year quarter.
Aided by higher revenues, Janus Capital Group Inc. (
) reported second-quarter 2014 earnings per share attributable to
common shareholders of 19 cents, inching past the Zacks Consensus
Estimate by a penny. Moreover, results compared favorably with the
prior-year quarter adjusted earnings of 12 cents.
Want the latest recommendations from Zacks Investment Research?
Today, you can download 7 Best Stocks for the Next 30 Days.
Click to get this free report
JANUS CAP GRP (JNS): Free Stock Analysis Report
BLACKSTONE GRP (BX): Free Stock Analysis Report
BLACKROCK INC (BLK): Free Stock Analysis Report
LAZARD LTD (LAZ): Free Stock Analysis Report
To read this article on Zacks.com click here.