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Affiliated Managers (AMG) Q2 Earnings Top, Revenues Fall Y/Y

Affiliated Managers Group Inc.’s AMG second-quarter 2020 economic earnings of $2.74 per share surpassed the Zacks Consensus Estimate of $2.70. However, the bottom line declined 17.7% year over year.

The results reflect lower operating expenses and a robust liquidity position. However, lower revenues, fall in assets under management (AUM) balance and decline in adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) were headwinds.

Economic net income was $129.6 million, down 23.8% from the prior-year quarter.

Revenues & AUM Down, Expenses Fall

Total revenues fell 20.4% year over year to $471.1 million. However, the top line beat the Zacks Consensus Estimate of $464 million.

Adjusted EBITDA was $162.1 million, down 26.1% from the year-ago quarter.

Total expenses decreased nearly 1% from the prior-year quarter to $409.6 million. Decline in compensation and related expenses, and selling, general and administrative costs primarily led to the fall.

As of Jun 30, 2020, total AUM was $638.4 billion, down 17.3% year over year. Net client cash outflows of $18.2 billion hurt AUM.

Capital & Liquidity Position Decent

As of Jun 30, 2020, Affiliated Managers had $681.6 million in cash and cash equivalents compared with $539.6 million on Dec 31, 2019. The company had $2 billion of debt, up 13.9% from the Dec 31, 2019 level.

Shareholders’ equity as of Jun 30, 2020 was $2.9 billion, on par with the Dec 31, 2019 level.

Share Repurchase Update

During the second quarter, the company repurchased shares worth $50 million.

Our Viewpoint

Affiliated Managers is well positioned for growth on the back of successful partnerships and global distribution capability, along with a diverse product mix. However, muted revenue growth and decline in AUM balance remain major concerns.

Affiliated Managers Group, Inc. Price, Consensus and EPS Surprise

Affiliated Managers Group, Inc. Price, Consensus and EPS Surprise

Affiliated Managers Group, Inc. price-consensus-eps-surprise-chart | Affiliated Managers Group, Inc. Quote

Affiliated Managers currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Performance of Other Asset Managers

SEI Investments Co.’s SEIC second-quarter 2020 earnings of 68 cents per share lagged the Zacks Consensus Estimate of 69 cents. Moreover, the figure reflects a decline of 17.1% from the prior-year quarter.

BlackRock, Inc.’s BLK second-quarter 2020 adjusted earnings of $7.85 per share comfortably surpassed the Zacks Consensus Estimate of $6.90. The figure reflects a rise of 22.5% from the year-ago number.

Cohen & Steers’ CNS second-quarter 2020 adjusted earnings of 54 cents per share missed the Zacks Consensus Estimate of 55 cents. Moreover, the bottom line was 12.9% lower than the year-ago reported figure.

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