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Fortress Investment (FIG) Q2 Earnings Lag, Revenues Decline

Zacks

Fortress Investment Group LLC FIG reported second-quarter 2017 pre-tax distributable earnings of 22 cents per share, missing the Zacks Consensus Estimate of 25 cents. Also, the reported figure represents a year-over-year decline of 15.4%.

Results were impacted by a decline in revenues and weak balance sheet position. However, lower expenses and improvement in assets under management (AUM) were the positives.

On a GAAP basis, net income came in at $32 million versus a net loss of $27 million in the prior-year quarter.

Revenues and Expenses Decline

Segment revenues for the quarter came in at $218 million, down 20% year over year. The decline was attributable to lower management fees and incentive income.

Segment expenses declined 18.9% year over year to $133 million. A decline in profit sharing compensation expense was the primary driver.

As of Jun 30, 2017, AUM was $72.4 billion, up nearly 3% sequentially and year over year. Also, the Logan Circle division witnessed net client inflows of nearly $0.7 billion.

Balance Sheet Position

As of Jun 30, 2017, cash and cash equivalents were $341.7 million, down from $397.1 million as of Dec 31, 2016.

As of the same date, debt obligations were $182.8 million, flat compared with the Dec 31, 2016 figure.

Total uncalled capital aggregated $7.5 billion as of Jun 30, 2017, out of which approximately $4.5 billion is available for common investment purposes.

Fortress Investment Group LLC Price, Consensus and EPS Surprise

Currently, Fortress Investment carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 (Strong Buy) Rank stocks here.

Other Investment Management Firms’ Results

BlackRock, Inc. BLK reported second-quarter 2017 adjusted earnings of $5.24 per share, which lagged the Zacks Consensus Estimate of $5.39. However, the bottom line came in 10% higher than the year-ago quarter.

Federated Investors, Inc. FII delivered a positive earnings surprise of around 6% for second-quarter 2017, marking the ninth straight quarter of earnings beat. Earnings per share of 53 cents beat the Zacks Consensus Estimate of 50 cents and improved 3.9% year over year.

Ameriprise Financial Inc.’s AMP second-quarter 2017 operating earnings per share of $2.80 comfortably surpassed the Zacks Consensus Estimate of $2.62. Also, the figure represents a year-over-year increase of 26%.

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