SEI Investments Co.
) fourth quarter 2012 earnings came in at 32 cents per share, in
line with the Zacks Consensus Estimate. Moreover, it surged 28%
from the year-ago quarter's earnings of 25 cents.
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On a year over-year-basis, the quarterly results were aided by a
growth in top line, partially offset by higher expenses.
Additionally, continued improvement in asset position and steady
capital deployment activity were the other positives.
Net income attributable to common shareholders reached $56.6
million for the fourth quarter, rising 27% from $44.4 million in
the prior-year quarter. For 2012, it stood at $206.8 million,
increasing 1% year over year.
For 2012, earnings per share came in at $1.18, at par with the
Zack Consensus Estimate and 6% above $1.11 in 2011.
Behind the Headlines
SEI's revenues grew 16% year over year to $261.6 million in the
reported quarter. This was also ahead of the Zacks Consensus
Estimate of $257.0 million. The improvement was mainly
attributable to an increase in asset management, administration
and distribution fee revenues.
For 2012, revenues were $992.5 million, climbing 7% from $929.7
million in 2011. Yet, this was below the Zacks Consensus Estimate
of $988.0 million.
Total expenses stood at $205.4 million, up 13% year over year.
The rise was primarily due to higher sub-advisory, distribution
and other asset management costs as well as increase in
compensation, benefits and other personnel costs.
Interest expense came in at $0.1 million, almost at par with the
prior-year quarter level. Operating income stood at $56.2,
jumping 27% from the year-ago quarter.
As of Dec 31, 2012, assets under management fell 15% year over
year and 9% sequentially to $172.0 billion. Total asset under
administration as of Dec 31, 2012 was recorded at $403.6 billion,
down 12% from $458.4 billion as of Dec 31, 2011 and 6% from
$427.9 billion as of Sep 30, 2012.
Capital Deployment Activities
In the reported quarter, SEI purchased 1.9 million shares of its
common stock for $41.7 million. Additionally, in Dec 2012, SEI
approved an increase in its stock repurchase program by $50
million, which also hiked the available authorization under the
program to about $100 million.
Further, the company declared a one-time, special cash dividend
of 32 cents per share. This dividend was paid on Dec 28, 2012 to
shareholders of record on Dec 21, 2012.
Investment appreciation in SEI, along with the growing need for
risk management and alternative investment solutions within the
financial service industry, is expected to contribute positively
over the long run. Moreover, the company's sound capital
deployment policy will reinforce investors' confidence. However,
persistent sluggish economic recovery will continue to keep the
company's financials under pressure in the near term.
Other investment management companies that are yet to report the
quarterly results include
Franklin Resources Inc.
Legg Mason Inc.
). Franklin will report its fiscal first quarter 2013
results and Legg Mason will announce its fiscal third quarter
2013 on Feb 1, 2013, while Lazard will declare its fourth quarter
and full-year 2012 results on Feb 7, 2013.
Currently, SEI retains a Zacks Rank #3 (Hold).