Moelis & Company (MC) Q1 Earnings Beat On Lower Expenses

Moelis & Company’s (NYSE:MC) first-quarter 2019 adjusted earnings of 27 cents per share surpassed the Zacks Consensus Estimate of 19 cents. However, the figure compared unfavorably with the prior-year quarter’s earnings of 84 cents.

Results benefited from lower expenses. Moreover, the company’s liquidity position remained strong. However, a decline in revenues hurt results to some extent.

Net income for the reported quarter (GAAP basis) was $16.2 million or 25 cents per share, down from $54 million or 75 cents recorded in the prior-year quarter.

Revenues & Costs Decline

Total revenues declined 37.2% year over year to $137.8 million. This decrease was mainly due to a fall in the number of transactions completed during the reported quarter. However, the top line beat the Zacks Consensus Estimate of $128.5 million.

Total operating expenses (adjusted basis) were $127.3 million, down 22.1% year over year. Fall in compensation and benefits costs led to this decline.

Other income was $1.4 million, up from $0.6 million recorded in the year-ago quarter.

As of Mar 31, 2019, Moelis & Company had cash and liquid investments of $78.4 million.

Share Repurchase Update

During the reported quarter, the company repurchased 94,726 shares for nearly $3.5 million.

Our Take

The company’s global expansion initiatives along with strategic partnerships in Japan, Australia and Mexico will likely continue supporting its top line. Also, a favorable operating environment, diversification across sectors and strong liquidity position will be conducive to its growth. However, rising operating expenses are expected to hurt the company’s profitability to some extent.

Currently, Moelis & Company carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Performances of Other Investment Management Stocks

BlackRock, Inc.’s (NYSE:BLK) first-quarter 2019 adjusted earnings of $6.61 per share surpassed the Zacks Consensus Estimate of $6.20. However, the figure was 1.3% lower than the year-ago quarter’s number.

Blackstone (NYSE:BX) reported first-quarter 2019 distributable earnings of 44 cents, lagging the Zacks Consensus Estimate of 52 cents. However, the figure reflects improvement from 41 cents earned in the prior-year quarter.

Invesco (NYSE:IVZ) reported first-quarter 2019 adjusted earnings of 56 cents per share, beating the Zacks Consensus Estimate of 52 cents. However, the figure was 16.4% below the prior-year quarter level.

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