Invesco's (IVZ) Q3 Earnings Beat Estimates, AUM Balance Up

Invesco IVZ reported third-quarter 2020 adjusted earnings of 53 cents per share, beating the Zacks Consensus Estimate of 48 cents. However, the bottom line declined 24.3% from the prior-year quarter.

Results reflect lower operating expenses and solid liquidity position. Also, assets under management (AUM) balance improved. However, decline in revenues was a headwind.

On a GAAP basis, net income attributable to common shareholders came in at $191.7 million or 41 cents per share compared with $167.1 million or 36 cents per share a year ago.

Revenues & Expenses Down

GAAP operating revenues were $1.5 billion, which decreased 13% year over year. Also, the figure missed the Zacks Consensus Estimate of $1.54 billion.

Adjusted net revenues declined 11.1% from the prior-year quarter to $1.09 billion. The fall was mainly due to significant market volatility.

Adjusted operating expenses were $685.8 million, down 5.6% from the prior-year quarter.

Adjusted operating margin was 37.2%, down from 40.9% a year ago.

As of Sep 30, 2020, cash and cash equivalents were $1.07 billion, up 8.1% sequentially. Further, long-term debt amounted to $2.17 billion, including the credit facility balance of $90 million.

AUM Balance Rise

As of Sep 30, 2020, AUM was $1.22 billion, which increased 2.9% year over year. Average AUM at third quarter-end totaled $1.21 billion, up 1.5%.

The company witnessed long-term net inflows of $7.8 billion.

Our View

Invesco remains well poised to benefit from its global footprint, product offerings and the OppenheimerFunds buyout. However, mounting expenses and economic slowdown are likely to hurt the company’s financials.

Invesco Ltd. Price, Consensus and EPS Surprise

Invesco Ltd. Price, Consensus and EPS Surprise

Invesco Ltd. price-consensus-eps-surprise-chart | Invesco Ltd. Quote

Currently, Invesco 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 third-quarter 2020 earnings of 75 cents per share lagged the Zacks Consensus Estimate of 81 cents. Moreover, the figure reflects a decline of 12.8% from the prior-year quarter.

Cohen & SteersCNS third-quarter 2020 adjusted earnings of 67 cents per share surpassed the Zacks Consensus Estimate of 60 cents. Moreover, the bottom line was 3.1% higher than the year-ago reported figure.

Affiliated Managers Group Inc.’s AMG third-quarter 2020 economic earnings of $3.27 per share surpassed the Zacks Consensus Estimate of $2.86. Also, the bottom line grew 3.5% year over year.

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

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