The investment management industry, part of the broader Finance sector, has performed decently over the past several quarters. However, the picture looks slightly grim this time around.
Amid the post-election euphoria and the Fed rate hike, S&P 500 gained 3.3% during the three months-ended Dec 31, 2016, while fixed income markets and emerging markets witnessed a loss. Hence, average asset under management levels for most of the investment managers are likely to report a decline. As such, excluding ETFs, flow trends should be muted.
Also, strengthening of the U.S. dollar is expected to put pressure on these companies' fees. In addition, heightened regulatory scrutiny has created a tough backdrop for traditional asset managers.
Notably, per our Earnings Preview , overall earnings for the Finance sector in the Oct-Dec 2016 quarter are expected to be up 20.8% year over year.
Now, let's have a look at the two investment management stocks that are scheduled to report their earnings tomorrow.
Prospect Capital CorporationPSEC , which is set to announce its second-quarter fiscal 2017 results after market close, has a Zacks Consensus Estimate of 23 cents for the upcoming release. It reflects year-over-year decline of about 16.1%. Notably, the estimates remained stable over the past 30 days.
Also, it is difficult to conclusively predict an earnings beat this quarter as the company carries a Zacks Rank #4 (Sell) with an Earnings ESP of 0.00%.
(You can uncover the best stocks to buy or sell before they're reported with our Earnings ESP Filter .)
Notably, the company delivered an average positive earnings surprise of 0.9% in the trailing four quarters as depicted in the chart below.
Prospect Capital Corporation Price and EPS Surprise
Prospect Capital Corporation Price and EPS Surprise | Prospect Capital Corporation Quote
The Carlyle Group LPCG , which is slated to report fourth quarter and 2016 results before the market opens, has a Zacks Consensus Estimate of 42 cents for the quarter. This indicates year-over-year surge of nearly 75.7%. Also, the estimates have been revised 2.4% upward over the past 30 days.
The company looks set to beat earnings this quarter as it has an Earnings ESP of +2.38% and Zacks Rank #3 (Hold). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here .
Nonetheless, the company delivered an average negative earnings surprise of 1.4% in the trailing four quarters as depicted in the chart below.
The Carlyle Group L.P. Price and EPS Surprise
The Carlyle Group L.P. Price and EPS Surprise | The Carlyle Group L.P. Quote
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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.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
