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Eaton Vance in Fiscal 4Q15: Falls in Revenue and Income

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Nov. 20 2020, Updated 3:48 p.m. ET

Eaton Vance’s price movement

Eaton Vance (EV) has a market cap of $4.2 billion. It’s YTD (year-to-date) price movement was a mix of rises and falls in fiscal 2015. After the 4Q15 earnings report, EV fell by 4.2% to close at $36.02 per share as of November 24, 2015. The price movement on a weekly, monthly, and YTD basis is -1.4%, 0.11%, and -9.7%, respectively.

Currently, EV is trading 2.2% below its 20-day moving average, 1.9% above its 50-day moving average, and 6.5% below its 200-day moving average.

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The PowerShares KBW Capital Markets Portfolio (KBWC) invests 3.7% of its holdings in Eaton Vance. The ETF tracks an index of large-cap capital markets companies weighted in tiers. The YTD price movement of KBWC is 1.2% as of November 23, 2015. The SPDR S&P Capital Markets ETF (KCE) invests 2.7% of its holdings in Eaton Vance.

The peers of Eaton Vance (EV) and their market caps are:

  • Franklin Resources (BEN) at $24.8 billion
  • T. Rowe Price (TROW) at $19.0 billion
  • Legg Mason (LM) at $4.6 billion
  • Waddell & Reed Financial (WDR) at $3.1 billion

Performance of Eaton Vance

Eaton Vance reported fiscal 4Q15 revenue of $341.4 million, a fall of 7.3% when compared to revenue of $368.4 million in fiscal 4Q14. Revenue from investment advisory and administrative fees, distribution and underwriter fees, and service fees fell by 7.6%, 8.0%, and 5.6%, respectively, in fiscal 4Q15 compared to fiscal 4Q14. Its compensation and the related cost rose by 8% in fiscal 4Q15.

Net income and EPS (earnings per share) fell to $62.2 million and $0.53, respectively, in fiscal 4Q15, as compared to net income and EPS of $80.1 million and $0.66, respectively, in fiscal 4Q14. Revenue and net income fell by 4.0% and 9.5%, respectively, in fiscal 4Q15 as compared to fiscal 3Q15.

Eaton Vance also declared a quarterly dividend of around $0.27 on its common stock.

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Fiscal 2015 results

In fiscal 2015, the company reported revenue of $1,403.6 million, a fall of 3.2% YoY (year-over-year). The company’s operating income fell by 23.0% in fiscal 2015. Its net income and EPS fell to $230.3 million and $1.92, respectively, in fiscal 2015, as compared to net income and EPS of $304.3 million and $2.44, respectively, in fiscal 2014. In fiscal 2015, adjusted net income fell 11.2% YoY to $275.0 million while EPS fell 7.7% YoY to $2.29.

Meanwhile, Eaton Vance’s cash and cash equivalents rose by 20.9%, and its investments fell by 18.8%, in fiscal 2015. The company’s debt-to-equity ratio rose to 2.25 in fiscal 2015, as compared to the debt-to-equity ratio of 1.66 in fiscal 2014. The AUM (assets under management) rose to $311.3 million in fiscal 2015, a rise of 4.6% YoY.

According to Eaton Vance’s chairperson and CEO, Thomas E. Faust Jr., “The fourth quarter of fiscal 2015 proved to be a difficult earnings period for the company due to product mix and market-driven declines in revenue. Continued improvement in core asset flows and advancement of new initiatives should position the company for resumed growth as they occur.”

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