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It has been about a month since the last earnings report for Affiliated Managers Group (AMG). Shares have added about 3.9% in that time frame, underperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Affiliated Managers due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.
Affiliated Managers' Q3 Earnings Meet Estimates, AUM Balance Improves
Affiliated Managers’ third-quarter 2024 economic earnings of $4.82 per share were in line with the Zacks Consensus Estimate. The bottom line also grew 18.1% from the prior-year number.
An improvement in the AUM balance was positive. Further, the company had a robust liquidity position. However, lower revenues and a rise in expenses were the undermining factors.
Economic net income was $153.2 million, up 2.5% year over year. Our estimate for this metric was $150.2 million.
Revenues Fall, Expenses Rise
Quarterly total revenues declined 1.7% year over year to $516.4 million. Also, the top line missed the Zacks Consensus Estimate of $521.4 million.
Adjusted EBITDA was $214.1 million, up 2.7%. We projected the metric to be $212.9 million.
Total consolidated expenses rose 4.8% to $374.7 million. We had projected total expenses of $360.4 million.
AUM Rises
As of Sept. 30, 2024, the total AUM was $728.4 billion, which grew 14.6%. Our estimate for total AUM was $699.5 million.
Net client cash outflows were $2.9 billion in the reported quarter.
Capital & Liquidity Position Decent
As of Sept. 30, 2024, Affiliated Managers had $1.01 billion in cash and cash equivalents compared with $813.6 million as of Dec. 31, 2023. The company had $2.62 billion of debt, down from $2.54 billion as of Dec. 31, 2023.
Stockholders’ equity as of Sept. 30, 2024, was $3.32 billion, down from $3.59 million as of Dec. 31, 2023.
Update on Share Repurchases
During the third quarter, Affiliated Managers repurchased shares worth $103 million.
Fourth-Quarter 2024 Outlook
Management expects adjusted EBITDA in the $260-$270 million range based on the current AUM levels and net performance fee earnings of roughly $50 million.
Interest expenses are expected to be $34 million. Controlling interest depreciation is likely to be $2 million.
Net income (controlling interest) is expected to be between $142 million and $149 million. The company’s share of reported amortization and impairments is anticipated to be $27 million.
Intangible-related deferred taxes are projected to be $16 million. Other economic items, which now include realized gains, are anticipated to be roughly $1 million.
Economic net income (controlling interest) is projected in the range of $186-$193 million.
Economic EPS is expected to be between $5.94 and $6.17.
The adjusted weighted average share count is estimated to be $31.3 million.