Evercore Q3 Earnings & Revenues Beat Estimates, Expenses Rise Y/Y
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Evercore Inc.’s EVR third-quarter 2024 adjusted earnings per share of $2.04 surpassed the Zacks Consensus Estimate of $1.95. Also, the bottom line compared favorably with the prior-year quarter’s reported figure of $1.30.
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Results benefited from an increase in revenues generated from the Investment Management and Investment Banking & Equities segments. Further, an improvement in assets under management (AUM) balance was another positive. However, the rise in expenses acted as a spoilsport.
Net income attributable to common shareholders (GAAP basis) was $78.4 million, which surged 50.3% from the year-ago quarter.
EVR’s Revenues & Expenses Rise
In the third quarter of 2024, total revenues of $738.4 million beat the Zacks Consensus Estimate of $695.4 million. Further, the top line increased 28.6% year over year.
On an adjusted basis, net revenues came in at $739.5 million, up 28.4% year over year.
Total expenses increased 24.1% year over year to $612.2 million. This was mainly due to a rise in all the components of total expenses.
The adjusted compensation ratio was 66%, down from the prior-year quarter’s 68%.
Adjusted operating margin was 18.2%, up from the prior-year quarter’s 14.4%.
EVR’s Quarterly Segmental Performance (GAAP Basis)
Investment Banking & Equities: Net revenues increased 29% year over year to $712.8 million. This rise was primarily due to an increase in all the components of net revenues. Also, operating income surged 59% to $116.4 million.
Investment Management: Net revenues were $21.4 million, up 22% from the prior-year quarter’s reported figure. Operating income was $5.6 million, up 55.1% year over year.
AUM was $13.9 billion as of Sept. 30, 2024, up 23.2% year over year.
EVR’s Balance Sheet Position
As of Sept. 30, 2024, cash and cash equivalents were $533.1 million and investment securities and certificates of deposit were $1.3 billion. Moreover, current assets exceeded current liabilities by $1.6 billion as of the same date.
EVR’s Capital Distributions Activities
On Oct. 22, the company declared a quarterly dividend of 80 cents per share. The dividend will be paid on Dec. 13, 2024, to common stockholders on record as of Nov. 29.
In the reported quarter, Evercore repurchased 0.4 million shares at an average price of $236.91.
Our View on Evercore
Evercore’s revenue growth was primarily due to its efforts to boost its client base in advisory solutions. Given the company’s decent liquidity position, capital distribution activities seem sustainable. However, a rising expense base is likely to impede the bottom-line growth in the near term.
