Invesco's (IVZ) Q4 Earnings Beat Estimates, AUM Balance Up
Invesco IVZ reported fourth-quarter 2020 adjusted earnings of 72 cents per share, surpassing the Zacks Consensus Estimate of 57 cents. Also, the bottom line grew 12.5% from the prior-year quarter.
Shares of Invesco rallied 1.1% in pre-market trading as investors cheer decent quarterly performance.
Results reflect lower operating expenses and solid liquidity position. Also, assets under management (AUM) balance improved. However, decline in revenues was an undermining factor.
On a GAAP basis, net income attributable to common shareholders was $211.1 million or 46 cents per share, up from $179.8 million or 39 cents per share a year ago.
In 2020, adjusted earnings per share of $1.93 outpaced the consensus estimate of $1.78 but declined 24.3% year over year. Net income attributable to common shareholders (GAAP) came in at $524.8 million or $1.13 per share, down from $564.7 million or $1.28 per share in 2019.
Revenues & Expenses Down
Quarterly GAAP operating revenues were $1.63 billion, which decreased 6.5% year over year. However, the top line beat the Zacks Consensus Estimate of $1.59 billion. Adjusted net revenues declined 3.1% to $1.23 billion.
In 2020, GAAP operating revenues improved marginally to $6.15 billion. However, it beat the consensus estimate of $6.03 billion. Adjusted net revenues grew 1.9% to $4.5 billion.
Adjusted operating expenses were $743 million, down 2.5% from the prior-year quarter.
Adjusted operating margin was 39.5%, down from 39.9% a year ago.
As of Dec 31, 2020, cash and cash equivalents were $1.41 billion, up 32% sequentially. Further, long-term debt amounted to $2.08 billion.
AUM Balance Rise
As of Dec 31, 2020, AUM was $1.35 trillion, which increased 10.1% year over year. Average AUM at fourth quarter-end totaled $1.28 trillion, up 6.5%.
The company witnessed long-term net inflows of $9.8 billion during the quarter.
Our Take
Invesco remains well poised to benefit from its global footprint, product offerings and the OppenheimerFunds buyout. However, elevated expenses and economic slowdown are likely to hurt the company’s financials.
Invesco Ltd. Price, Consensus and EPS Surprise
Invesco Ltd. price-consensus-eps-surprise-chart | Invesco Ltd. Quote
Currently, Invesco sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Earnings Dates of Other Asset Managers
Ameriprise Financial, Inc. AMP, Cohen & Steers, Inc. CNS and SEI Investments Company SEIC are scheduled to announce quarterly numbers on Jan 27.
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