2023-07-25 08:25:58 ET
Invesco ( NYSE: IVZ ) stock fell 3.1% in Tuesday premarket after the asset manager's Q2 earnings and revenue both fell short of Wall Street expectations as the quarter was marked with net long-term outflows and higher expenses, bolstered by costs from executive retirements.
Q2 adjusted EPS of $0.31, vs. $0.40 consensus, fell from $0.38 in the prior quarter and from $0.39 in the year-ago period.
Net long-term outflows of $2.0B reversed from $2.9B inflows in the prior quarter. Institutional long-term outflows were $2.2B while retail net long-term inflows were $0.2B.
By asset class, net long-term inflows from equity products ($1.9B) and fixed income ($1.0B), were more than offset by net long-term outflows at balanced products ($1.5B) and alternative products ($3.4B).
"The second quarter highlighted the unevenness in financial markets and the continued uncertainty among investors," Andrew Schlossberg, who became president and CEO at the end of June, succeeding Marty Flanagan.
Net market gains increased assets under management by $46.5B during the quarter, and foreign exchange rate movements subtracted $6.8B. Invesco ( IVZ ) saw inflows of $15.4B from money market funds and $1.1B from non-management fee earning products during the quarter.
Ending AUM of $1.54T rose 3.7% during the quarter and 2.2% from June 30, 2022.
Q2 adjusted net revenue of $1.09B, trailing the $1.11B consensus, rose 1.4% Q/Q and dropped 7.1% Y/Y.
Q2 adjusted operating expenses of $788.7M, vs. the Visible Alpha consensus of $762.5M, increased from $749.0M in Q1 and from $762.0M in Q2 2022. Employee compensation expenses rose related to executive retirements and organizational changes of $27.0M and variable compensation associated with performance fees, partly offset by lower payroll taxes and benefit.
Adjusted operating margin of 27.7% vs. 30.4% in the prior quarter and 35.1% a year ago.
Conference call at 9:00 AM ET.
Earlier, Invesco ( IVZ ) non-GAAP EPS of $0.31, misses by $0.09, revenue of $1.09B misses by $20M
More on Invesco:
- Asset managers tally robust AUM gains in first half of 2023 amid market rally
- Invesco's previous income statements
- Invesco AUM rises 3.4% in June, aided by market returns, net inflows
- Invesco: Revisiting Upside, Upgrade to Buy
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Invesco Q3 earnings, missing consensus, reflect outflows, higher expenses