Better-than-expected revenues stemming from a rise in assets
under management (AUM) drove
SEI Investments Co.
) fourth-quarter 2013 earnings per share of 37 cents, which beat
the Zacks Consensus Estimate by a penny. Further, it rose 16%
from 32 cents earned in the year-ago quarter.
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For the full year 2013, SEI Investments recorded earnings per
share of $1.64 versus $1.18 in 2012. Excluding one-time gains
related to the sale of SEI Asset Korea and litigation settlement
payment in first and second quarter 2013, respectively, full-year
2013 earnings per share of $1.39 was in line with the Zacks
Results benefited from top-line growth, partially offset by
higher expenses. Consistent improvement in asset position and
steady capital deployment activities were the other tailwinds for
Net income attributable to common shareholders was $65.5 million,
up 16% year over year. However, for the full year, net income
came in at $288.1 million, increasing 39% from $206.8 million in
Behind the Headlines
Revenues at SEI Investments grew 14% year over year to $299.0
million in the reported quarter. The improvement was mainly
attributable to a rise in asset management, administration,
distribution as well as Information processing and software
servicing fees. Further, it beat the Zacks Consensus Estimate of
For 2013, total revenue came in at $1.13 billion, up 13% from
$992.5 million in 2012. Moreover, total revenue surpassed the
Zacks Consensus Estimate of $1.12 billion.
Total expenses were $230.6 million, up 12% from the prior-year
quarter. The increase was owing to a rise in all the components
except for a decline of nearly 1% in brokerage commissions and 6%
in depreciation costs.
Operating income increased 21.8% from the year-ago quarter to
As of Dec 31, 2013, AUM rose 15% year over year to $231.9
billion. Total client AUM was recorded at $327.3 billion, up 27%
from $256.8 billion as of Dec 31, 2012.
In the said quarter, SEI Investments repurchased 1.9 million
shares of its common stock for $64.7 million.
SEI Investment will continue to benefit from the growing demand
for risk management and alternative investment solutions in the
financial service industry. The company's capital deployment
activities in the form of share buybacks and dividend hikes make
it an attractive pick for investors. Further, strong asset
inflows will likely boost its overall growth going forward.
However, we remain apprehensive about the persistent low
interest-rate environment, and stringent regulations.
Currently, SEI Investments carries a Zacks Rank #2 (Buy).
Among other investment mangers,
Artisan Partners Asset Management Inc.
) is scheduled to report its results on Feb 3, while
Waddell & Reed Financial, Inc.
Affiliated Managers Group Inc.
) will do so on Feb 4.