Artisan Partners (APAM) Q1 Earnings Top Estimates, Cost Down

Artisan Partners Asset Management (NYSE:APAM) first-quarter 2019 adjusted earnings came in at 55 cents per share, surpassing the Zacks Consensus Estimate by a penny. However, the bottom line was 29.5% lower than the year-ago quarter figure.

Results were adversely impacted by fall in revenues. Also, decline in assets under management (AUM) and net outflows acted as headwinds. Nonetheless, lower expenses remained a positive factor.

Net income available to common stockholders (GAAP basis) was $31.5 million or 47 cents per share, down from $41.3 million or 75 cents per share in the prior-year quarter.

Decline in Revenues Offset by Lower Expenses

Revenues came in at $187 million, down 11.8% from the year-ago quarter. The fall primarily resulted from lower management fees. However, the revenue figure surpassed the Zacks Consensus Estimate of $185 million.

Management fees earned from the Artisan Funds & Artisan Global Funds were down 14.6% year over year to $114.3 million. Management fees earned from Separate accounts decreased 7.2% to $72.6 million.

Total expenses amounted to $129.3 million, down 2% year over year. The decline was largely due to a fall in employee compensation and benefits expenses.

Operating income was $57.7 million, down 27.9% year over year.

AUM Declines on Net Outflows

As of Mar 31, 2019, AUM was $107.8 billion, down nearly 6.1% from the year-earlier quarter. The company witnessed net outflows of $1.11 billion against outflows of $603 million a year ago.

Also, average AUM for the reported quarter totaled $104.9 billion, down nearly 11%.

As of Mar 31, 2019, cash and other investments were $152.2 million compared with $160.5 million as of Dec 31, 2018.

Our Viewpoint

Artisan Partners’ diverse investment products are expected to support growth. Also, prudent cost management aids profitability to some extent. However, decline in AUM given the outflows hampers the top line.

Artisan Partners Asset Management Inc. Price, Consensus and EPS Surprise

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

Performance of Other Asset Managers

T. Rowe Price Group (NASDAQ:TROW) first-quarter 2019 adjusted earnings per share came in at $1.87, outpacing the Zacks Consensus Estimate of $1.63. Results also improved 7.5% from the year-ago figure of $1.74.

Cohen & Steers’ (NYSE:CNS) first-quarter 2019 adjusted earnings came in at 58 cents per share, missing the Zacks Consensus Estimate by a penny. Also, the bottom line was 6.5% lower than the year-ago quarter figure.

Federated Investors, Inc. (NYSE:FII) reported first-quarter 2019 earnings per share of 54 cents which lagged the Zacks Consensus Estimate of 57 cents. Moreover, the figure compares unfavorably with the prior-year quarter earnings of 60 cents.

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