Advertisement
Singapore markets close in 42 minutes

  • Straits Times Index

    3,277.14
    -10.61 (-0.32%)
     

  • Nikkei

    37,934.76
    +306.28 (+0.81%)
     

  • Hang Seng

    17,675.82
    +391.28 (+2.26%)
     

  • FTSE 100

    8,117.89
    +39.03 (+0.48%)
     

  • Bitcoin USD

    64,427.80
    +356.75 (+0.56%)
     

  • CMC Crypto 200

    1,387.54
    -9.00 (-0.64%)
     

  • S&P 500

    5,048.42
    -23.21 (-0.46%)
     

  • Dow

    38,085.80
    -375.12 (-0.98%)
     

  • Nasdaq

    15,611.76
    -100.99 (-0.64%)
     

  • Gold

    2,359.30
    +16.80 (+0.72%)
     

  • Crude Oil

    83.99
    +0.42 (+0.50%)
     

  • 10-Yr Bond

    4.7060
    +0.0540 (+1.16%)
     

  • FTSE Bursa Malaysia

    1,574.46
    +5.21 (+0.33%)
     

  • Jakarta Composite Index

    7,061.01
    -94.29 (-1.32%)
     

  • PSE Index

    6,628.75
    +53.87 (+0.82%)
     

Invesco (IVZ) Q4 Earnings Miss Estimates on Higher Expenses

Zacks Equity Research
·3-min read

Invesco IVZ reported fourth-quarter 2019 adjusted earnings of 64 cents per share, missing the Zacks Consensus Estimate of 70 cents. However, the bottom line surged 45.5% from the prior-year quarter.

Results reflect a rise in assets under management (AUM) balance and higher revenues, driven by the OppenheimerFunds buyout. However, increase in operating expenses and net outflows were the major headwinds.

On a GAAP basis, net income attributable to common shareholders came in at $179.8 million or 39 cents per share, up from $114.2 million or 28 cents per share a year ago.

The company’s 2019 adjusted earnings totaled $2.55 per share, lagging the consensus estimate of $2.61, but growing 4.9% year over year. On a GAAP basis, net income attributable to common shareholders came in at $564.7 million or $1.28 per share, down from $882.8 million or $2.14 per share in 2018.

Revenues & Expenses Rise

GAAP operating revenues in the quarter were $1.74 billion, increasing 38.8% year over year. However, the figure missed the Zacks Consensus Estimate of $1.75 billion. Adjusted net revenues jumped 37.9% to $1.27 billion.

In 2019, GAAP operating revenues were $6.12 billion, up 15.1% year over year and beat the Zacks Consensus Estimate of $6.06 billion. Adjusted net revenues jumped 15.6% to $4.42 billion.

Adjusted operating expenses were $762.3 million, up 23.1% from the prior-year quarter.

Adjusted operating margin was 39.9% compared with 32.6% a year ago.

AUM Improves

As of Dec 31, 2019, AUM was $1.27 billion, surging 38.1% year over year. Average AUM for the fourth quarter totaled $1.20 billion, up 29.9%. AUM growth was mainly driven by the closure of the deal to acquire OppenheimerFunds in May 2019 and strong equity markets performance.

Further, the December quarter witnessed long-term net outflows of $14 billion.

Share Repurchase Update

During the fourth quarter, Invesco repurchased shares worth $11 million.

As of 2019 end, the company repurchased $973 million worth of shares since announcing $1.2 billion buyback authorization in October 2018. Further, Invesco is on track to repurchase the remaining $227 million by the first quarter of 2021.

Our View

Invesco remains well poised to benefit from improved global investment flows, supported by a diversified footprint, product offering and the OppenheimerFunds buyout. However, mounting expenses and outflows are likely to hurt its financials.

Invesco Ltd. Price, Consensus and EPS Surprise

 

Invesco Ltd. Price, Consensus and EPS Surprise
Invesco Ltd. Price, Consensus and EPS Surprise

Invesco Ltd. price-consensus-eps-surprise-chart | Invesco Ltd. Quote

ADVERTISEMENT

Currently, Invesco carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Performance & Release Date of Other Investment Managers

BlackRock, Inc.’s BLK fourth-quarter 2019 adjusted earnings of $8.34 per share surpassed the Zacks Consensus Estimate of $7.67. Moreover, the figure was 37.2% higher than the year-ago quarter’s number.

Cohen & Steers’ CNS fourth-quarter 2019 adjusted earnings of 74 cents per share surpassed the Zacks Consensus Estimate of 67 cents. Also, the bottom line was 32.1% higher than the year-ago quarter figure.

Affiliated Managers Group, Inc. AMG is slated to announce results on Feb 3.

Looking for Stocks with Skyrocketing Upside?

Zacks has just released a Special Report on the booming investment opportunities of legal marijuana.

Ignited by new referendums and legislation, this industry is expected to blast from an already robust $6.7 billion to $20.2 billion in 2021. Early investors stand to make a killing, but you have to be ready to act and know just where to look.   

See the pot trades we're targeting>>


Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
 
Invesco Ltd. (IVZ) : Free Stock Analysis Report
 
BlackRock, Inc. (BLK) : Free Stock Analysis Report
 
Affiliated Managers Group, Inc. (AMG) : Free Stock Analysis Report
 
Cohen & Steers Inc (CNS) : Free Stock Analysis Report
 
To read this article on Zacks.com click here.
 
Zacks Investment Research