Invesco’s IVZ first-quarter 2023 adjusted earnings of 38 cents per share surpassed the Zacks Consensus Estimate of 36 cents. The bottom line, however, plunged 32.1% from the prior-year quarter. Our estimate for earnings was 31 cents.
Shares of Invesco lost almost 1.5% in pre-market trading despite better-than-expected quarterly performance. A full day’s trading will reflect a clear picture.
Results benefited from a decline in operating expenses. On the other hand, lower assets under management (AUM) balance and long-term outflows hurt revenues.
On a GAAP basis, net income attributable to common shareholders was $145 million or 32 cents per share, down from $197.7 million or 43 cents per share a year ago.
Revenues & Expenses Decline
Adjusted quarterly net revenues were $1.08 billion, falling 14.1% year over year. The top line matched the Zacks Consensus Estimate. Our estimate for net revenues was $1.03 billion.
Adjusted operating expenses were $749 million, down 1.2%. We expected the metric to be $749.1 million.
The adjusted operating margin was 30.4%, down from 39.5% a year ago.
AUM Balance Falls
As of Mar 31, 2023, AUM was $1.48 trillion, which declined 4.7% year over year. Average AUM at the first-quarter end totaled $1.46 trillion, down 5.3%.
The company witnessed long-term net inflows of $2.9 billion in the quarter.
Balance Sheet Strong
As of Mar 31, 2023, cash and cash equivalents were $889 million compared with $1.23 billion on Dec 31, 2022.
Long-term debt amounted to $1.49 billion. The credit facility balance was nil as of Mar 31, 2023. Also, the company renegotiated its credit facility, increasing capacity to $2.0 billion from $1.5 billion. Also, the maturity date has been extended to April 2028 at favorable terms.
Concurrently, Invesco announced a quarterly cash dividend of 20 cents per share, representing an increase of 7% from the prior payout. The dividend will be paid out on Jun 2 to shareholders as on May 9.
Invesco remains well-poised to benefit from its global footprint, product offerings and strategic buyouts. However, elevated expenses, a challenging market environment and high debt levels are major near-term concerns.
Invesco Ltd. Price, Consensus and EPS Surprise
Currently, IVZ 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
BlackRock, Inc.’s BLK first-quarter 2023 adjusted earnings of $7.93 per share surpassed the Zacks Consensus Estimate of $7.71. However, the figure reflects a decrease of 16.7% from the year-ago quarter. Our estimate for adjusted earnings was $7.37.
BLK’s results have benefited from a decline in expenses. However, lower revenues and AUM balance were major headwinds.
SEI Investments Co.’s SEIC first-quarter 2023 earnings of 79 cents per share missed the Zacks Consensus Estimate of 82 cents. The bottom line reflects a decline of 41.9% from the prior-year quarter. Our estimate for earnings was 78 cents.
SEIC’s results were adversely impacted by lower revenues. Also, marginally higher expenses created a headwind. Nevertheless, an increase in AUM balance positively impacted the results in the quarter.
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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.