FHI - Why did Federated Hermes stock drop today? Investors weigh Q2 earnings

2023-07-28 15:42:21 ET

Federated Hermes ( NYSE: FHI ) stock retreated 6.6% in mid-afternoon trading as the investment manager turned in Q2 earnings that rose slightly less than expected and revenue that climbed past the average analyst estimate.

Q2 GAAP EPS of $0.81 , a hair under the $0.82 consensus, advanced from $0.78 in Q1 and from $0.64 in the year-earlier quarter.

Revenue of $433.2M, vs. $395.2M expected, rose 13% from the quarter ended March 31, and 18% for the quarter ended June 30, 2022. Driving the increase, net investment advisory fees of $310.3M jumped 20% sequentially and 18% from a year ago, and net administrative service fees of $85.2M gained 21% Q/Q and 8% Y/Y.

"In the second quarter, Federated Hermes benefited from a breadth of investment offerings and robust client relationships, as record assets under management were again driven by money market asset increases from the prior quarter," President and CEO Christopher Donahue said in a statement . AUM reached $704.0B in Q2.

Total operating expenses, though, rose to $334.8M from $297.0M in Q1 and from $273.7M in Q2 of last year.

Total long-term assets ended the quarter at $194.9B compared with $195.2B in Q1 and $192.2B in Q2 2022.

More on Federated Hermes:

• Federated Hermes's Q2 2023 earnings call transcript
• SA's Quant system rates FHI a Buy
• Federated Hermes: Positives Aren't Priced In

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