* Q4 EPS 35 cents vs 44 cents year ago
* Adjusted EPS 45 cents vs Wall Street view 47 cents
* Customer net inflow totaled $1 billion
Jan 31 Money manager Invesco Ltd, which
runs the Powershares brand of exchange-traded funds, said on
Thursday its fourth-quarter profit slipped 22 percent as the
firm gathered less new money from customers than in prior
Shares of Atlanta-based Invesco lost $1.30, or 4.6 percent,
to $26.98 in midday trading on the New York Stock Exchange.
Customers added a net $1 billion to Invesco's funds and
accounts during the quarter, down 91 percent from the prior
period and 83 percent from the fourth quarter of 2011, Invesco
said in a statement on Thursday.
Assets under management at Atlanta-based Invesco totaled
$687.7 billion, up 0.7 percent during the quarter.
Invesco was not alone in seeing slowing flows amid investor
confusion in the fourth quarter. Competitors T. Rowe Price Group
and Janus Capital Group have also reported
fourth quarter net outflows from their customers.
Customers withdrew $5.7 billion from Invesco's equity
accounts and about $600 million from alternative assets while
adding $3.4 billion to fixed income products and $3.9 billion to
balanced accounts, Invesco said. Money market customers added
about $100 million.
Overall flows also were reduced by $1.6 billion because a
collateralized debt obligation managed by Invesco matured during
Like much of the rest of the industry, improving investor
enthusiasm about stocks bolstered Invesco's flows in January,
after the quarter ended. Gross sales of U.S. equity funds rose
56 percent from the firm's monthly average in the fourth
quarter, Chief Executive Martin Flanagan said on a call with
"January is not a year. It's not multiple years," Flanagan
said. "But it is a very encouraging sign and probably something
very different than what we have seen in many years."
Invesco's adjusted net revenue increased 8.2 percent from a
year earlier to $775.9 million. Employee compensation increased
9.5 percent to $342 million.
Invesco Chief Financial Officer Loren Starr said
compensation would remain about the same in the first quarter,
leading several analysts to question Invesco about the size of
the fourth-quarter increase.
"It's something that is not lost in us," CEO Flanagan
responded. "We think the way we are doing compensation is
Compensation should decline as a proportion of revenue as
the year continues, Flanagan said.
Analysts had expected higher customer inflow and lower
compensation expenses. "If the company could strike a better
balance between performance and expenses, the stock could see
better momentum," Glenn Schorr, an analyst at Nomura Securities,
wrote after the earnings were released.
Net income totaled $158.7 million, or 35 cents per share, in
the fourth quarter compared with $202.3 million, or 44 cents per
share, in the same period a year earlier, Invesco said.
That included an expense of $24 million for the early
redemption of debt that was refinanced during the fourth
quarter, costs to outsource some of Invesco's operations in
Europe and other items.
Excluding those items, Invesco said its adjusted net income
increased 6 percent from a year earlier to $202.6 million and
adjusted net income per share was 45 cents.
Analysts on average had expected net income per share
excluding items of 47 cents per share, according to Thomson