Technology

Evercore (EVR) Down 11.1% Since Last Earnings Report: Can It Rebound?

A month has gone by since the last earnings report for Evercore (EVR). Shares have lost about 11.1% in that time frame, underperforming the S&P 500.

Will the recent negative trend continue leading up to its next earnings release, or is Evercore due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.

Evercore Q2 Earnings Beat Estimates on Higher Revenues

Evercore delivered a positive earnings surprise of 17.6% in second-quarter 2019. Adjusted earnings per share of $2.07 surpassed the Zacks Consensus Estimate of $1.76. Further, the figure came in significantly higher than the prior-year quarter’s earnings of $1.65 per share.

The quarterly results reflected higher revenues and rise in AUM. In addition, liquidity position was consistently strong. However, escalating expenses were a major drag.

Including certain one-time items, on a GAAP basis, net income available to common shareholders was $81.7 million or $1.88 per share compared with $68.9 million or $1.52 per share in the year-ago quarter.

Revenues Increase, Expenses Rise

Net revenues increased 18% year over year to $535.8 million in the reported quarter. This upside resulted from hike in advisory fees (up 22%) and higher other revenues. On a GAAP basis, net revenues were $531 million, up 18%.

Total expenses flared up 18% to $385.4 million from the prior-year quarter. This upswing stemmed from rise in employee compensation and benefits expenses, along with elevated non-compensation costs.

Adjusted compensation ratio was 58%, up from 57.8% in the year-earlier quarter’s figure.

Adjusted operating margin came in at 25.8% compared with the prior-year quarter’s 25.5%.

Quarterly Segment Performance (Adjusted)

Investment Banking: Net revenues jumped 18% year over year to $518.9 million. Also, operating income increased 20% to $133.5 million. Advisory client transactions were 225,000, up 4% year over year.

Investment Management: Net revenues were $16.9 million, up 13% from the comparable quarter last year. Operating income was $5 million compared with the $4.2 million recorded a year ago. Additionally, AUM of $10.1 million was reported in the second quarter, up 5%.  

Balance Sheet Position

As of Jun 30, 2019, cash, cash equivalents, marketable securities and certificates of deposit totaled $591.4 million. Moreover, current assets exceeded current liabilities by $651.6 million as of the same date.

Capital Deployment

During the June-end quarter, the company repurchased 1.3 million shares at an average cost of $84.30 and returned $133.5 million to shareholders, including dividends.

How Have Estimates Been Moving Since Then?

Analysts were quiet during the last two month period as none of them issued any earnings estimate revisions.


Click to get this free report

Evercore Inc (EVR): Free Stock Analysis Report

To read this article on Zacks.com click here.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.