SEI Investments Co.
) rose 6.1% on Wednesday following its strong second-quarter 2014
earnings. Earnings per share came in at 48 cents beating the Zacks
Consensus Estimate of 42 cents. Moreover, the reported figure was
up 51.6% from the year-ago quarter. A one-time gain was excluded
from the prior-year earnings per share.
Consistent growth in top line emerged as the main reason for the
better-than-expected results. However, rising expenses dampened it
to some extent. Enhanced asset position and steady capital
deployment activities were the other favorable factors.
Net income attributable to common shareholders came in at $82.8
million, down nearly 1% from the prior-year quarter.
Sei Investments Company - Earnings Surprise |
Behind the Headlines
Revenues at SEI Investments grew 16% year over year to $318.8
million. The upturn was primarily owing to higher asset management,
administration and distribution fees as well as elevated cash
flows, partly offset by lower execution fees. Moreover, the figure
surpassed the Zacks Consensus Estimate of $314.0 million.
Total expenses totaled $213.6 million, up 4% from the prior-year
quarter. The increase resulted from a rise in most of the expense
components. However, this was partially offset by a decline in
brokerage commissions, stock-based compensation, consulting,
outsourcing and professional fees as well as depreciation costs.
Operating income surged 62% year over year to $93.6 million.
As of Jun 30, 2014, assets under management (AUM) rose 22% year
over year to $249.1 billion. Total client AUM was recorded at
$352.8 billion, up 17% year over year.
In the said quarter, SEI Investments bought back 2.2 million shares
of its common stock for $71.6 million. As of Jul 22, 2014, the
available authorization under the program was roughly $140.5
SEI Investments' robust performance in the quarter was based on
impressive growth in all its business segments. Also, the company's
capital deployment activities in the form of share buybacks and
dividend hikes make it a striking buy for investors. Moreover, the
company's strong asset inflows will also likely improve its overall
growth going forward.
On the other hand, the continuing low interest rate environment,
rising expenses and stringent regulations pose challenges.
Currently, SEI Investments has a Zacks Rank #1 (Strong Buy).
Among other investment mangers,
Ameriprise Financial, Inc.
) are scheduled to announce results on Jul 29 and Jul 31,
Franklin Resources Inc.
) will release third-quarter fiscal 2014 results on Jul 30.
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
INVESCO LTD (IVZ): Free Stock Analysis Report
AMERIPRISE FINL (AMP): Free Stock Analysis
FRANKLIN RESOUR (BEN): Free Stock Analysis
SEI INVESTMENTS (SEIC): Free Stock Analysis
To read this article on Zacks.com click here.