Higher Expenses to Hurt Apollo's Q4 Earnings, AUM Growth to Support

Apollo Global Management, Inc. APO is scheduled to announce fourth-quarter 2024 results on Feb. 4, before market open. While APO’s quarterly earnings are anticipated to have declined from the year-ago reported level, revenues are expected to have risen.Stay up-to-date with all quarterly releases: See Zacks Earnings Calendar.In the last reported quarter, APO’s earnings surpassed the Zacks Consensus Estimate. Results were primarily aided by strong performance across all segments. Higher assets under management (AUM) balances supported results. However, rising expenses acted as a headwind in the quarter.Apollo’s earnings beat the consensus estimate in two of the trailing four quarters and missed twice, the average earnings surprise being 1.09%.Apollo Global Management Inc. Price and EPS Surprise Apollo Global Management Inc. price-eps-surprise | Apollo Global Management Inc. QuoteApollo’s Q4 Earnings and Sales EstimatesThe Zacks Consensus Estimate for APO’s earnings of $1.90 has moved downward over the past seven days. The figure indicates a decline of nearly 1% from the year-ago quarter.The consensus estimate for sales is pegged at $950 million, suggesting a year-over-year rise of 19.5%.Apollo’s Partnership Expansion in Q4In November 2024, Apollo extended its multi-billion-dollar partnership with Mubadala Investment Company, focusing on global origination opportunities. This move is likely to have bolstered Apollo’s Capital Solutions business and boosted its fourth-quarter performance by expanding its global investment opportunities and increasing deal flow.Key Factors & Estimates for APO in Q4Supported by overall asset inflows on the back of favorable markets, the company’s total AUM balance is expected to have improved. Also, its diversified asset classes, client bases and geographies are likely to have supported AUM growth in the quarter-to-be reported.The Zacks Consensus Estimate for the company’s total AUM in the fourth quarter of 2024 is pegged at $755.4 billion, which suggests a sequential rise of 3.1%.The consensus estimate for management fees (segment earnings) for the fourth quarter of 2024 is pegged at $730.8 million, indicating a sequential rise of 2.9%.In the fourth quarter of 2024, the consensus estimate for fee-related performance fees (segment earnings) is pegged at $58.15 million, indicating a rise of 2% from the previous quarter’s reported number.The consensus estimate for net capital solutions fees and other (segment earnings) in the fourth quarter of 2024 is pinned at $149.1 million, indicating a sequential decline of 6.2%.On the cost front, the company’s ongoing investments in building out its capital formation and credit investing teams, along with charges related to mergers, is likely to have kept the expenses base elevated in the fourth quarter.What Our Model Predicts for APOPer our proven model, the chances of APO beating estimates this time are low. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. That is not the case here, as you can see below. You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter.Earnings ESP: Apollo has an Earnings ESP of -0.55%.Zacks Rank: APO currently has a Zacks Rank of 3.APO Peers Worth a LookHere are a couple of asset managers that you may want to consider, as our model shows that these have the right combination of elements to post an earnings beat this time:AllianceBernstein Holding L.P. AB is slated to release fourth-quarter 2024 earnings on Feb. 6. The company has a Zacks Rank #3 and an Earnings ESP of +4.75% at present. You can see the complete list of today’s Zacks #1 Rank stocks here.AB’s quarterly earnings estimates have remained unchanged at 81 cents per share over the past week.Ameriprise Financial, Inc. AMP is scheduled to release fourth-quarter earnings on Jan. 29. The company, which carries a Zacks Rank #3 at present, has an Earnings ESP of +1.73%.AMP’s quarterly earnings estimates have moved downward to $8.94 over the past week.5 Stocks Set to DoubleEach was handpicked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2024. While not all picks can be winners, previous recommendations have soared +143.0%, +175.9%, +498.3% and +673.0%.Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.Today, See These 5 Potential Home Runs >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Ameriprise Financial, Inc. (AMP): Free Stock Analysis Report AllianceBernstein Holding L.P. (AB): Free Stock Analysis Report Apollo Global Management Inc. (APO): Free Stock Analysis ReportTo read this article on Zacks.com click here.Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks