Lazard Q3 Earnings Miss on Higher Expenses, AUM Rises Y/Y, Stock Up

Lazard Inc.’s LAZ third-quarter 2024 adjusted earnings per share of 38 cents missed the Zacks Consensus Estimate of 41 cents. This compared favorably with earnings of 10 cents in the year-ago quarter.Stay up-to-date with all quarterly releases: See Zacks Earnings Calendar.Lazard’s results were negatively impacted due to a rise in expenses and weak performance in the corporate segment. Nonetheless, an increase in revenues in the financial advisory and asset management segment, along with a rise in assets under management (AUM) balances offered support. Considering these positives, shares of the company were up 4.5% following the release of its third-quarter 2024 results.Lazard’s net income (GAAP) was $107.9 million, which increased significantly from $7.1 million reported in the prior-year quarter.Lazard’s Revenues IncreaseQuarterly operating revenues were $645.9 million, which rose 21.5% year over year. However, the top line missed the Zacks Consensus Estimate of $652.7 million.Lazard’s Expenses RiseOperating expenses were $623.7 million, up 17.9% year over year. Our estimate was pegged at $584 million.The ratio of adjusted compensation expenses to operating revenues was 66%, down from the year-earlier quarter’s 68.4%. The ratio of adjusted non-compensation expenses to operating revenues was 21.4%, down from the year-ago quarter’s 25.9%.Lazard’s Segmental PerformanceFinancial Advisory: The segment’s adjusted operating revenues were $368.7 million, rising 41.1% from the year-earlier quarter’s levels. We had projected the metric to be $369.7 million.Asset Management: Segmental adjusted operating revenues of $271.5 million increased 3.6% from the prior-year quarter’s figure. Our estimate was pinned at $272 million.Corporate: Adjusted operating revenues from this segment were $5.6 million, down 30.2% from the year-earlier quarter’s tally. Our estimate was pegged at $14.6 million.LAZ’s AUM RisesAs of Sept. 30, 2024, the total AUM was $247.7 billion, which increased marginally from $246.7 in the prior-year quarter. Our projection for the metric was pinned at $231.7 billion.The quarter witnessed a market appreciation of $9.4 billion, a foreign exchange appreciation of $6 billion and net outflows of $12.4 billion. Our estimate for net outflows was pegged at $2.7 billion.The average AUM in the reported quarter was $246 billion, up 4.1% year over year. Our estimate was $238.2 billion.Lazard’s Balance Sheet Position StrongLazard’s cash and cash equivalents totaled $1.2 billion as of Sept. 30, 2024, up 78.4% year over year. Stockholders’ equity was $680 million, up 62.1% from the year-ago quarter’s levels.Lazard’s Share Repurchase UpdateIn the reported quarter, Lazard repurchased $3 million worth of its common shares.LAZ’s Dividend UpdateOn Oct. 31, 2024, Lazard declared a quarterly dividend of 50 cents on its outstanding common stock. The dividend is payable on Nov. 15, 2024, to stockholders of record on Nov. 8, 2024.Our View on LazardLazard is focused on growing organically, evident from its strong AUM balance, along with a quarterly increase in revenues. A strong liquidity position will aid its financials in the upcoming period. However, increased dependence on advisory revenues and continued net outflows will affect Lazard’s top-line growth in the upcoming period. Lazard, Inc. Price, Consensus and EPS Surprise Lazard, Inc. price-consensus-eps-surprise-chart | Lazard, Inc. QuoteCurrently, Lazard carries a Zacks Rank #3 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.Performance of Other Asset ManagersBlackRock’s BLK third-quarter 2024 adjusted earnings of $11.46 per share handily surpassed the Zacks Consensus Estimate of $10.34. The figure reflected a rise of 5% from the year-ago quarter.BLK’s results benefited from a rise in revenues and higher non-operating income. AUM witnessed robust growth and touched the $11.45 trillion mark driven by net inflows and market appreciation. However, higher expenses acted as a headwind.Invesco’s IVZ third-quarter 2024 adjusted earnings of 44 cents per share came in line with the Zacks Consensus Estimate. The bottom line increased 25.7% from the prior-year quarter.IVZ’s results were primarily aided by a decline in adjusted expenses and higher adjusted net revenues. An increase in the AUM balance on decent inflows was a positive too.Zacks' Research Chief Names "Stock Most Likely to Double"Our team of experts has just released the 5 stocks with the greatest probability of gaining +100% or more in the coming months. Of those 5, Director of Research Sheraz Mian highlights the one stock set to climb highest.This top pick is among the most innovative financial firms. With a fast-growing customer base (already 50+ million) and a diverse set of cutting edge solutions, this stock is poised for big gains. Of course, all our elite picks aren’t winners but this one could far surpass earlier Zacks’ Stocks Set to Double like Nano-X Imaging which shot up +129.6% in little more than 9 months.Free: See Our Top Stock And 4 Runners UpWant 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 BlackRock, Inc. (BLK): Free Stock Analysis Report Invesco Ltd. (IVZ): Free Stock Analysis Report Lazard, Inc. (LAZ): 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