SEI Investments Co .'s ( SEIC ) first-quarter
2013 earnings came in at 41 cents per share, surpassing the Zacks
Consensus Estimate of 34 cents. Moreover, it surged 46.4% from the
year-ago earnings of 28 cents.FRANKLIN RESOUR (BEN): Free Stock Analysis
ReportLAZARD LTD (LAZ): Free Stock Analysis ReportLEGG MASON INC (LM): Free Stock Analysis ReportSEI INVESTMENTS (SEIC): Free Stock Analysis
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The year-over-year improvement was aided by top-line growth,
partially offset by higher expenses. Continued improvement in asset
position and steady capital deployment activities were the other
Net income attributable to common shareholders reached $71.9
million, rising 44% from $50.0 million in the prior-year
Behind the Headlines
Revenues at SEI grew 14.3% year over year to $271.9 million in the
reported quarter. This marginally beat the Zacks Consensus Estimate
of $271.0 million. The improvement was mainly attributable to a
rise in asset management, administration and distribution fee
revenues along with increases in information processing and
software servicing fees.
Total expenses stood at $211.8 million, up 11.6% year over year.
The rise was primarily due to higher expenses in software royalties
and other information processing, brokerage commissions,
compensation, benefits and other personnel, stock based
compensation, consulting, outsourcing and professional, data
processing and computer related costs, facilities, supplies,
amortization, depreciation cost, and other costs, partially
mitigated by a decline in sub-advisory, distribution and other
asset management costs. However, interest expense came in at $0.1
million, down 29.8% year over year.
Operating income increased 24.9% year over year to $60.0
As of Mar 31, 2013, assets under management rose 9.3% year over
year and 2.3% sequentially to $206.2 billion. Total assets under
administration as of that period were recorded at $494.8 billion,
up 15.6% from $427.9 billion as of Mar 31, 2012 and 7.9% from
$458.4 billion as of Dec 31, 2012.
Capital Deployment Activities
During the quarter, SEI repurchased 1.3 million shares of its
common stock for $36.2 million.
SEI's increasing investments and growing need for risk management
and alternative investment solutions within the financial service
industry are expected to contribute positively to the company's
financials in the long run. Moreover, its sound capital deployment
strategies are impressive. Further, the company's robust asset
inflows are expected to prove accretive to its overall growth going
However, we remain apprehensive about the persisting low
interest-rate environment, sluggish economic recovery and a
stringent regulatory landscape.
Among other investment management companies, Lazard
Ltd . ( LAZ
) is scheduled to report its first-quarter 2013 earnings on Apr 26
while Franklin Resources Inc . ( BEN ) will report its
second-quarter 2013 earnings on Apr 30. Alongside, Legg
Mason Inc . ( LM ) is scheduled to
report its fourth quarter and full-year 2013 earnings on Apr
Currently, SEI carries a Zacks Rank #2 (Buy).