Federated Hermes Q4 Earnings Beat Estimates, Revenues Increases Y/Y

In This Article:

Federated Hermes, Inc.’s FHI fourth-quarter 2024 adjusted earnings per share of $1.04 topped the Zacks Consensus Estimate of 96 cents. The bottom line increased 8% from the year-ago quarter.

Find the latest earnings estimates and surprises on the Zacks Earnings Calendar.

An increase in net administrative service fees is a major driving factor. The company’s total managed assets touched a record level. An increase in revenues was an added advantage.

Net income (GAAP basis) of $84.7 million rose 3% from the year-ago quarter.

In 2024, earnings of $3.23 per share topped the consensus estimate of $3.10. The metric rose from $3.40 in 2023. Net income was $268.3 million in 2024, which fell 10% from the prior year.

FHI’s Revenues & Operating Expenses

Total revenues increased 8% year over year to $424.7 million. The top line surpassed the Zacks Consensus Estimate by 1.2%.

For 2024, operating revenue was $1.63 billion, which met the Zacks Consensus Estimate. The top line rose 1% year over year.

Quarterly net investment advisory fees rose 9% year over year to $288.3 million. Our estimate for the metric was $280.9 million.

Net other service fees rose 2% year over year to $36.6 million and net administrative service fees rose 10% to $99.7 million. Our estimate for the other service fees and administrative service fees was pegged at $38.2 million and $99 million, respectively.

Total operating expenses increased 9% year over year to $314.3 million. Our expectation for the metric was $327.5 million.

Federated Hermes recorded a net non-operating income of $1.9 million compared with $14.7 million in the prior-year quarter.

Federated Hermes’ Balance Sheet Position

As of Dec. 31, 2024, cash and other investments and total long-term debt were $641 million and $348.1 million compared with $565 million and $348 million, respectively, as of Sept. 30, 2024.

FHI’s Asset Position

As of Dec. 31, 2024, total managed assets were at a record level of $829.6 billion, up 9.5% year over year. Our estimate for the metric was $815.8 billion.

FHI reported money-market assets of $630.3 billion, up 12.6% year over year. Fixed-income assets increased 3.3% to $98 billion. Our expectations for money-market and fixed-income assets were $606.3 billion and $101.1 billion, respectively.

Equity assets of $79.4 billion increased 1.1% from the prior-year quarter. Alternative/private market assets fell 8.2% to $18.9 billion. Our estimate for equity assets and alternative/private market assets was $83.9 billion and $21.4 billion, respectively.

Average managed assets totaled $805.4 billion, up 10.5% year over year. Our estimate was $804.7 billion.


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