Moelis & Company (MC) Beats Q3 Earnings Estimates, Hikes Dividend

Moelis & Company MC recorded third-quarter 2020 adjusted earnings per share of 54 cents, surpassing the Zacks Consensus Estimate of 2 cents. However, the figure deteriorated from the year-ago quarter’s reported figure of 76 cents per share.

Results were primarily hurt by a fall in revenues. However, lower expenses and a solid liquidity position were tailwinds.

Net income (GAAP basis) was $41.8 million or 54 cents per share compared with net income of $54.7 million or 73 cents recorded in the prior-year quarter.

Revenues & Expenses Decline

Total revenues fell 10% year over year to $207.6 million. The downside was primarily caused by lesser merger and acquisitions (M&A) transactions. However, the top line surpassed the Zacks Consensus Estimate of $140.8 million.

Total operating expenses (adjusted basis) were $154.9 million, down 8.5% year over year. Decline in compensation and benefits costs led to the fall.

Other expenses (GAAP basis) were $1.6 million against other income of $14.3 million recorded in the year-ago quarter.

As of Sep 30, 2020, the company had cash and liquid investments of $266.3 million, with no debt or goodwill.

Dividend Hike

The company declared a dividend hike of 50% from the second quarter to 38.25 cents per share. The dividend will be paid out on Nov 30, 2020 to shareholders of record as of Nov 6.

Our Take

The company’s solid liquidity position and absence of debt strengthens the balance sheet and supports it capital deployment activities. Fall in expenses also acted as a tailwind. However, decline in revenues is a concern for the company. Further, as it expands operations into sectors and products, overall costs are expected to remain elevated.

Moelis Company Price, Consensus and EPS Surprise

Moelis  Company Price, Consensus and EPS Surprise

Moelis Company price-consensus-eps-surprise-chart | Moelis Company Quote

Currently, Moelis & Company 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 Companies

Navient Corporation NAVI reported third-quarter 2020 core earnings per share of 99 cents that beat the Zacks Consensus Estimate of 78 cents. Also, the bottom line was above the year-ago quarter’s figure of 62 cents.

Riding on solid mortgage banking, Synovus Financial SNV reported third-quarter 2020 adjusted earnings of 89 cents per share, beating the Zacks Consensus Estimate of 48 cents. However, the reported figure comes in 8.7% lower than the prior-year quarter’s tally.

Northern Trust NTRS delivered third-quarter 2020 earnings per share of $1.32, missing the Zacks Consensus Estimate of $1.40, on lower revenues. Also, the reported figure declined 21.9% year over year. Results included certain one-time items.

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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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