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What's in Store for Affiliated Managers (AMG) in Q2 Earnings?

Zacks Equity Research

Affiliated Managers Group Inc. AMG is slated to report second-quarter 2019 results on Jul 29, before the opening bell. Its earnings and revenues for the to-be-reported quarter are projected to decline year over year.

In the last reported quarter, the company’s economic earnings lagged the Zacks Consensus Estimate. Results were adversely impacted by a decline in revenues and fall in assets under management (AUM).

Nevertheless, the company boasts an impressive earnings surprise history. Its earnings surpassed the consensus estimate in three of the trailing four quarters, the average beat being 0.5%.

Affiliated Managers Group, Inc. Price and EPS Surprise

Affiliated Managers Group, Inc. Price and EPS Surprise
Affiliated Managers Group, Inc. Price and EPS Surprise

Affiliated Managers Group, Inc. price-eps-surprise | Affiliated Managers Group, Inc. Quote

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However, activities of the company during the second quarter failed to encourage analysts to revise earnings estimates upward. Thus, the Zacks Consensus Estimate for earnings of $3.19 for the to-be-reported quarter has remained unchanged over the past seven days. Also, it indicates 11.6% decline from the year-ago quarter’s reported figure.

The consensus estimate for sales is pegged at $546.5 million, indicating a fall of 8.9% from the year-ago quarter.

Factors to Impact Q2 Results

Affiliated Managers holds an almost unbeaten track record of buying equity interests in asset management companies, with strong performance-oriented products. The past equity investments are expected to support the company’s top line in the to-be-reported quarter as well.

Management expects the ratio of adjusted earnings before interest, taxes, depreciation and amortization to average AUM to be 10.8 basis points (bps) for the to-be-reported quarter. Further, other economic items are projected to be around $1 million.

On the cost front, management projects total interest expenses of around $20 million in the second quarter, up 9.9% from the last reported quarter.

Also, the company’s share of amortization and impairments are expected to be $48 million, up from $29.6 million recorded in the prior quarter.

Earnings Whispers

Now, let’s check what our quantitative model predicts.

According to our quantitative model, chances of Affiliated Managers beating the Zacks Consensus Estimate in the second quarter are low. This is because it does not have the right combination of the two key ingredients — a positive Earnings ESP and a Zacks Rank #3 (Hold) or higher — for increasing the odds of an earnings beat.

You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Earnings ESP: The Earnings ESP for Affiliated Managers is +0.91%.

Zacks Rank: The company currently carries a Zacks Rank #4 (Sell), which decreases the predictive power of ESP.

Stocks That Warrant a Look

Here are some finance stocks that you may want to consider, as according to our model, these have the right combination of elements to post an earnings beat this quarter.

Franklin Resources, Inc. BEN is slated to release results on Jul 30. It has an Earnings ESP of +0.13% and currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Grupo Financiero Galicia S.A. GGAL is expected to release results on Aug 16. It presently has an Earnings ESP of +10.50% and a Zacks Rank #2 (Buy).

Banco Macro S.A. BMA is expected to release results on Aug 28. It has an Earnings ESP of +11.83% and a Zacks Rank #3.

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Grupo Financiero Galicia S.A. (GGAL) : Free Stock Analysis Report
 
Macro Bank Inc. (BMA) : Free Stock Analysis Report
 
Franklin Resources, Inc. (BEN) : Free Stock Analysis Report
 
Affiliated Managers Group, Inc. (AMG) : Free Stock Analysis Report
 
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Zacks Investment Research