Markets
OZM

Why Och-Ziff Capital Management Group LLC Stock Plunged Today

Shares of are plunging today, declining more than 14% as of 11 a.m. ET after the company reported discouraging earnings for the fourth quarter.

What: Shares of Och-Ziff Capital Management Group LLC are plunging today, declining more than 14% as of 11 a.m. ET after the company reported discouraging earnings for the fourth quarter.

So what: Och-Ziff disappointed investors with a distributable earnings loss of $36.1 million, or $0.07 per share, for the fourth quarter compared to a consensus estimate that it would break even on a distributable income basis. Furthermore, it said it would not pay a dividend this quarter, whereas analysts expected a small distribution of $0.02 per share, according to Reuters.

The company reported that it had $45.5 billion in assets under management (AUM) at the end of the fourth quarter. It estimated that AUM declined to start 2016, dropping to $43.7 billion as of Feb. 1, 2016.

Last year simply wasn't the year investors wanted to see. Och-Ziff lost roughly 4% of its AUM in 2015, due entirely to customer redemptions (outflows) and distributions to its investors.

Now what: Och-Ziff's funds continue to lose fee-earning AUM, and declines may be accelerating. In Jan. 2016 alone, the company lost $1.2 billion of AUM to outflows, equal to its outflows for full-year 2015.

Unless its fund performance improves, 2016 could be another challenging year. Revenue fell 50% in the fourth quarter compared to the year-ago period, due mostly to a decline in incentive income earned for meeting return requirements on its funds. Incentive income makes or breaks its year, and 2016 will be no different.

The next billion-dollar iSecret

The world's biggest tech company forgot to show you something at its recent event, but a few Wall Street analysts and the Fool didn't miss a beat: There's a small company that's powering their brand-new gadgets and the coming revolution in technology. And we think its stock price has nearly unlimited room to run for early in-the-know investors! To be one of them, just click here .

The article Why Och-Ziff Capital Management Group LLC Stock Plunged Today originally appeared on Fool.com.

Jordan Wathen has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days . We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy .

Copyright © 1995 - 2016 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy .

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.

In This Story

OZM

Other Topics

Stocks

Latest Markets Videos

The Motley Fool

Founded in 1993 in Alexandria, VA., by brothers David and Tom Gardner, The Motley Fool is a multimedia financial-services company dedicated to building the world's greatest investment community. Reaching millions of people each month through its website, books, newspaper column, radio show, television appearances, and subscription newsletter services, The Motley Fool champions shareholder values and advocates tirelessly for the individual investor. The company's name was taken from Shakespeare, whose wise fools both instructed and amused, and could speak the truth to the king -- without getting their heads lopped off.

Learn More