Yahoo Finance Federated Hermes Inc (FHI) Q1 2024 Earnings Surpass Analyst Expectations
Earnings Per Share (EPS): Reported at $0.89 for Q1 2024, surpassing estimates of $0.88.
Net Income: Reached $75 million in Q1 2024, exceeding the estimated $71.68 million.
Revenue: Totalled $396.37 million for Q1 2024, falling short of the estimated $401.26 million.
Dividend: Announced a quarterly dividend of $0.31, up 10.7% from the previous quarter, along with a $1.00 special dividend.
Assets Under Management (AUM): Achieved a record high of $778.7 billion, marking an 11% increase year-over-year.
Money Market Assets: Also reached a record at $578.8 billion, a 14% increase from the previous year.
Equity and Fixed-Income Assets: Equity assets slightly declined by 4% year-over-year to $80.2 billion, while fixed-income assets grew by 10% to $96.3 billion.
On April 25, 2024, Federated Hermes Inc (NYSE:FHI), a global leader in active, responsible investment management, announced its first-quarter earnings for 2024, revealing figures that exceeded analyst expectations. The company reported an earnings per share (EPS) of $0.89, slightly above the estimated $0.88, and net income of $75 million against an expected $71.68 million. Revenue also topped forecasts at $396.37 million compared to the anticipated $401.26 million. For a detailed look at the earnings, view the 8-K filing.
Company Overview
Federated Hermes Inc provides comprehensive asset management services for a diverse client base, including institutional and individual investors. As of the end of December 2023, the company managed $757.6 billion across various fund types, with a significant emphasis on money market funds which are expected to generate approximately 46% of this year's revenue. Federated Hermes distributes its products primarily through trust banks, wealth managers, and retail broker/dealers, which account for 63% of its managed assets.
Performance Highlights and Strategic Moves
The first quarter of 2024 was marked by a significant increase in total managed assets, reaching a record $778.7 billion, an 11% increase from the previous year. This growth was driven primarily by a $73 billion increase in money market assets, which reached a new high of $578.8 billion. Federated Hermes' strategic focus on liquidity products and fixed-income offerings, such as the Federated Hermes Total Return Bond Fund and related ETFs, has effectively attracted investor interest amid fluctuating market conditions.
Additionally, the company's equity assets saw a modest increase, with top-selling funds including the Federated Hermes MDT Mid Cap Growth Fund and the Federated Hermes MDT Large Cap Growth Fund. Despite a slight decline in alternative/private markets assets, the overall asset growth underscores Federated Hermes' robust positioning in the investment management sector.
Financial Details and Dividend Announcement
Federated Hermes' revenue for Q1 2024 saw a 4% increase from the same period last year, primarily due to higher average money market assets. However, this was partially offset by a decrease in equity asset revenues. Operating expenses saw a minimal increase, while nonoperating income decreased by 26%, mainly due to a smaller increase in the market value of investments.
The board of directors declared a dividend of $1.31 per share, consisting of a $0.31 quarterly dividend and a $1.00 special dividend, payable on May 15, 2024. This declaration reflects a 10.7% increase in the quarterly dividend amount, underscoring the company's strong cash position and commitment to shareholder returns.
Market Position and Future Outlook
Federated Hermes continues to rank highly within the asset management industry, being in the top 7% of equity fund managers and the top 8% of money market fund managers. The company's strategic emphasis on high-demand sectors like money markets and fixed-income products, combined with its robust dividend policy, positions it well for sustained growth and stability in the dynamic financial markets.
As Federated Hermes moves forward, its ability to adapt to market conditions and investor needs will be crucial in maintaining its growth trajectory and leading position in the asset management industry.
For further information, including future earnings calls and detailed financial analyses, investors and interested parties are encouraged to visit the Federated Hermes website.
Explore the complete 8-K earnings release (here) from Federated Hermes Inc for further details.
This article first appeared on GuruFocus.
