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What Analysts Expect from Invesco’s 4Q17 Revenues

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Dec. 29 2017, Published 9:10 a.m. ET

Performance fees

Invesco (IVZ) garnered total performance fees of $70.3 million in the first three quarters of 2017 versus $26.8 million in the same period of the prior year, an increase of $43.5 million. As of September 30, 2017, the company has total assets under management (or AUM) of $917.5 billion, out of which around $46.1 billion is eligible for the generation of performance fees.

The foreign exchange rate fluctuations have negatively impacted the company’s performance fees in 9M17 compared to 9M16. On an LTM (last-12-month) basis, Invesco posted free cash flow yields of 3.2%, while peers (XLF) PNC Financial Services Group (PNC), Virtus Investment Partners (VRTS), and Morgan Stanley (MS) posted 5.6%, 4.2%, and 5.2%, respectively.

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Other revenues

Invesco generated other revenues of $51.2 million in 9M17 (first nine months of 2017) compared to $72.2 million in 9M16, a fall of 29.1%, which is mainly because of a decline in the real estate transaction fees and front-end fees of $4.2 million and $15.1 million, respectively.

The foreign exchange rate fluctuations had an unfavorable impact on the company’s other revenues. After excluding these fluctuations, other revenues fell $20.7 million.

EPS and revenue estimates

Wall Street analysts have given a high estimate of $0.72 and a low estimate of $0.67 for earnings per share (or EPS) on Invesco for 4Q17. The average estimate stood at $0.69 for the same period, which represents a decline from the adjusted diluted EPS that the company posted in 3Q17.

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