Research Desk Line-up: CM Finance Post Earnings Coverage
LONDON, UK / ACCESSWIRE / September 13, 2017 / Pro-Trader Daily has just published a free post-earnings coverage on Eaton Vance Corp. (NYSE: EV), which can be viewed by registering at http://protraderdaily.com/optin/'symbol=EV, following the Company's release of its third quarter fiscal 2017 financial results on August 23, 2017. The investment manager missed top- and bottom-line expectations. Our daily stock reports are accessible for free, and with those to look forward today you also will be signing up for a complimentary member's account at:
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Get more of our free earnings reports coverage from other constituents of the Asset Management industry. Pro-TD has currently selected CM Finance Inc. (NASDAQ: CMFN) for due-diligence and potential coverage as the Company announced on September 06, 2017, its financial results for Q4 FY17 which ended on June 30, 2017. Register for a free membership today, and be among the early birds that get access to our report on CM Finance when we publish it.
At Pro-TD, we make it our mission to bring you news that matter about the stock you follow. Today, our research desk covers a blog story on EV; also brushing on CMFN. With the links below you can directly download the report of your stock of interest free of charge at:
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Earnings Reviewed
In Q3 FY17, Eaton Vance's revenue increased 15% to $393.7 million from $341.2 million in Q3 FY16. The Company's revenue numbers fell short of analysts' expectations of $400 million.
During Q3 FY17, Eaton Vance's management fees grew 16%, due to a 22% gain in average consolidated assets under management which more than offset lower average management fee rates. The Company's performance fees contributed $0.5 million in the reported quarter compared to $2.7 million in the year ago same period.
For Q3 FY17, Eaton Vance's operating expenses grew 16% to $272.7 million from $234.4 million in Q3 FY16; reflecting increases in compensation, distribution expense, service fee expense, amortization of deferred sales commissions, fund-related expenses, and other operating expenses. The Company's expenses in connection with Eaton Vance's NextShare exchange-traded managed funds initiative were $2.0 million in Q3 FY17 and $2.4 million in Q3 FY16.
Eaton Vance's operating income surged 13% to $121.0 million in Q3 FY17 from $106.7 million in Q3 FY16. The Company's operating margin decreased to 30.7% in the reported quarter from 31.3% in the year ago comparable period. Excluding the $3.5 million and $2.3 million of closed-end fund structuring fees paid during Q3 FY17 and Q3 FY16, respectively, operating income was up by 14% and operating margins decreased to 31.6% in the reported quarter from 32.0% in the year ago corresponding period.
For Q3 FY17, Eaton Vance's non-operating expense totaled $6.0 million versus $4.1 million in Q3 FY16. The Company's equity in net income of affiliates was $2.3 million and $3.0 million in the reported quarter and the year ago same period, respectively, substantially all relating to the Company's investment in Hexavest, Inc.
Eaton Vance reported earnings per diluted share of $0.58 for Q3 FY17; an increase of 5% from $0.55 of earnings per diluted share in Q3 FY16. The Company recorded adjusted earnings per diluted share of $0.62 for the reported quarter; up 11% from $0.56 of adjusted earnings per diluted share in the year ago comparable period, but fell short of Wall Street's estimates of $0.67 per share.
Key Metrics
During Q3 FY17, Eaton Vance's consolidated net inflows of $9.1 billion represented a 9% annualized internal growth rate in managed assets compared to net inflows of $7.1 billion and 9% in Q3 FY16. On the basis of net contribution to management fee revenue, the Company's annualized internal revenue growth rate was 6% in the reported quarter from 3% in Q3 FY16.
Eaton Vance's consolidated assets under management were $405.6 billion as on July 31, 2017; up 21% from $334.4 billion of consolidated managed assets as on July 31, 2016, and up 5% from $387.0 billion of consolidated managed assets as on April 30, 2017. The y-o-y increase in consolidated assets under management reflects net inflows of $34.7 billion and market price appreciation of $26.5 billion over the twelve-month period, and $9.9 billion of new managed assets gained in the acquisition of the business assets of Calvert Investment Management, Inc. on December 30, 2016. Eaton Vance's average consolidated assets under management were $395.2 billion in Q3 FY17; up 22% from $324.9 billion in Q3 FY16.
During Q3 FY17, excluding performance-based fees, annualized management fee rates on Eaton Vance's consolidated assets under management averaged 34.2 basis points, down 4% from 35.6 basis points in Q3 FY16. Changes in average management fee rates for the compared periods primarily reflect the ongoing shift in the Company's mix of business toward lower-fee mandates. Eaton Vance's consolidated redemptions and other outflows were $30.7 billion in Q3 FY17, up 25% from $24.5 billion in Q3 FY16.
As of July 31, 2017, Eaton Vance's 49% owned affiliate Hexavest managed $15.4 billion of client assets, up 7% from $14.4 billion of managed assets as on July 31, 2016, and $14.5 billion of managed assets as on April 30, 2017. Hexavest had net inflows of $0.4 billion in Q3 FY17 versus net outflows of $0.5 billion and $0.6 billion in Q3 FY16 and Q2 FY17, respectively.
Balance Sheet Information
Eaton Vance's cash and cash equivalents totaled $550.2 million as on July 31, 2017, with no outstanding borrowings against the Company's $300 million credit facility. Included within investments was $84.5 million of holdings of short-term debt securities with maturities between 90 days and one year. During the first nine months of the fiscal year 2017, the Company used $100.2 million to repurchase and retire approximately 2.3 million shares of its Non-Voting Common Stock under its repurchase authorizations. Eaton Vance noted that of the current 8.0 million shares repurchase authorization, approximately 6.6 million shares remain available.
Stock Performance
At the closing bell, on Tuesday, September 12, 2017, Eaton Vance's stock rose slightly by 0.99%, ending the trading session at $47.04. A total volume of 512.27 thousand shares have exchanged hands. The Company's stock price surged 2.26% in the past six months and 20.18% in the previous twelve months. Moreover, the stock rallied 12.32% since the start of the year. The stock is trading at a PE ratio of 20.43 and has a dividend yield of 2.38%. The stock currently has a market cap of $5.45 billion.
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