Cohen & Steers (CNS) Up 8.7% Since Last Earnings Report: Can It Continue?
It has been about a month since the last earnings report for Cohen & Steers (CNS). Shares have added about 8.7% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Cohen & Steers due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.
Cohen & Steers' Q4 Earnings Miss on Lower Revenues
Cohen & Steers’ fourth-quarter 2018 adjusted earnings came in at 56 cents per share, missing the Zacks Consensus Estimate of 60 cents. However, the bottom line was 1.8% higher than the year-ago quarter figure.
Results were adversely impacted by fall in revenues and higher expenses. Further, decline in assets under management (AUM) and net inflows were the major headwinds.
Net income available to common stockholders (GAAP basis) for the reported quarter was $25.6 million or 54 cents per share, up from $20.4 million or 43 cents per share in the prior-year quarter.
For 2018, adjusted earnings of $2.40 per share lagged the Zacks Consensus Estimate of $2.45. However, it grew 15.9% year over year. Net income available to common stockholders (GAAP basis) was $113.9 million, up 23.9% from 2017 level.
Revenues Decline, Expenses Rise
The company’s quarterly revenues (GAAP basis) came in at $93.9 million, down 5.6% from the year-ago quarter. The fall was mainly due to lower investment advisory and administration fees.
For 2018, revenues (GAAP basis) increased nearly 1% year over year to $381.1 million.
Total expenses (GAAP basis) amounted to $59.6 million, up 1.8% year over year. The increase was largely owing to a rise in employee compensation and benefits expenses.
Operating income (GAAP basis) was $34.3 million, down 16.1% year over year.
Total non-operating loss was $3.3 billion against total non-operating income of $2.8 million in the prior-year quarter.
AUM Declines on Net Outflows
As of Dec 31, 2018, AUM was $57.6 billion, down 7.1% from the year-earlier quarter. The company witnessed net outflows of $1.19 billion in the reported quarter against inflows of $227 million in the prior-year quarter.
Also, average AUM for the reported quarter totaled $54.8 billion, down 11.7%.
2019 Outlook
Management expects G&A expenses to remain stable at $46 million or decline.
Compensation to revenue ratio is expected to be 35.75%.
Management expects effective tax rate to be 25.25%.
How Have Estimates Been Moving Since Then?
Analysts were quiet during the last two month period as none of them issued any earnings estimate revisions.
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