Evercore (EVR) First Quarter Earnings Beat Estimates, Revenue Increases Year-over-Year
Evercore EVR reported adjusted earnings per share of $3.8 for the first quarter of 2022, beating Zacks’ consensus estimate of $3.1. Additionally, net income was 15.5%, up from the prior year quarter level of $3.29 per share.
Impressive revenue growth, supported by higher advisory fees, contributed to results. In addition, an increase in assets under management (“AUM”) was a tailwind. In addition, Evercore’s liquidity position has always been strong. However, escalating spending has been a major drag.
On a GAAP basis, net income available to common shareholders was $158 million or $3.79 per share, compared to $144.4 million or $3.25 per share in the prior year quarter.
Revenues soar, expenses soar
Total revenue increased 9% year-over-year to a record $727.1 million in the quarter under review. Additionally, revenue exceeded the consensus estimate of $673.6 million. An increase in advisory fees, as well as asset management and administration fees, drove the increase. On an adjusted basis, net revenue was $728.3 million, up 8.7% year-over-year.
Total expenses increased 9.7% to $513.5 million from the year-ago quarter level. This decrease was partially offset by lower execution, clearing and custody fees.
The adjusted compensation ratio was 59%, stable compared to the prior year quarter.
Adjusted operating margin was 29.5%, down from 30.1% in the prior year quarter.
Quarterly sector performance (adjusted)
investment bank: Net revenue increased 8.7% year over year to $708.9 million. Operating profit rose 6.6% to $208.4 million. Underwriting fees of $36.3 million in the quarter fell 54% from the level in the prior year period.
Investment management: Net revenue was $19.4 million, up 8.4% from the prior year quarter. Operating profit was $6.5 million, up 3.3% from the year-ago quarter count. Assets under management of $11.6 billion were seen in the first quarter, up 9% from the level of the prior year quarter.
Balance sheet position
As of March 31, 2022, cash and cash equivalents were $454.8 million, and marketable securities and certificates of deposit were $1.1 billion. Current assets exceeded current liabilities by $1.4 billion on the same date.
Capital deployment activities
On April 26, 2022, Evercore announced a 6% increase in its quarterly cash dividend to 72 cents per share. The dividend will be paid on June 10 to its shareholders of record on May 27.
Earlier in February, the board of directors approved share buyback authorization up to the lesser of $1.4 billion or 10 million shares and/or LP units.
Additionally, Evercore returned $289.3 million worth of capital to its shareholders during the quarter through dividends and buybacks of two million shares at an average price of $128.14.
Our point of view
Evercore showed an impressive performance during the first quarter. The solidity of its turnover reflects the stability of its profits. That aside, EVR’s strategic moves to strengthen its investment banking segment bode well. While its growing spending is a concern, EVR is well positioned to undertake any opportunistic expansion given its strong liquidity position.
Evercore Inc Price, Consensus and EPS Surprise
Evercore Inc price-consensus-eps-surprise-chart | Quote from Evercore Inc.
Currently, Evercore has a Zacks rank of No. 3 (Hold). You can see the full list of today’s Zacks #1Rank (Strong Buy) stocks here.
Performance of other banks
UMB Financial UMBF reported net operating income per share of $2.17 in the first quarter of 2022, beating Zacks consensus estimate of $1.65. Net income also compares favorably to prior year quarter earnings of $1.91.
UMBF’s results were supported by higher revenues, driven by higher net interest income (“NII”) and commission income. A strong balance sheet position was another bright spot. Higher spending and deteriorating credit quality were headwinds. Capital ratios have declined.
Northern Trust Company NTRS posted a 6.63% profit for the first quarter of 2022. Earnings per share of $1.77 beat Zacks’ consensus estimate of $1.66. Net income improved 4% year-on-year.
Higher revenues, aided by an increase in commission income and NII, were a driving factor for the NTRS. Most credit indicators also showed significant improvements. However, a growing expense base and low capital ratios were headwinds.
UBS Group AG UBS reported net profit attributable to shareholders of $2.1 billion in the first quarter of 2022, up 17.1% from the year-ago quarter level.
UBS’s performance was driven by a 10% rise in the NII compared to the year-ago quarter. Capital’s strong position was a tailwind.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.