Invesco Ltd. (IVZ) reported fourth-quarter 2010 earnings that were higher than last quarter and a year ago but disappointed analysts' expectations just the same as stronger stock market results were tempered by fallout from the firm's June acquisition of Morgan Stanley's mutual-funds business.
The Atlanta-based investment manager said in its Q4 news release that earnings per share for the year were 32.9% higher, at $1.01 compared with $0.76 in 2009, while quarterly EPS came in at $0.37 compared with $0.32 in the third quarter. Analyst consensus was for EPS of $0.40.
Profits were up 44.4% for the year, at $465.7 million versus $322.5 million in 2009, and up 13.3% for the quarter, at $175.2 million versus $154.7 million in Q3.
"Invesco's efforts to provide strong, long-term investment performance to our clients contributed to enhanced operating results for the firm during 2010," said President and Chief Executive Martin Flanagan in a statement. "Driven by strong investment performance, an improved market environment and the successful integration of Morgan Stanley's retail asset management business, Invesco reported a 55% increase in adjusted earnings per share year over year."
However, Sandler O'Neill & Partners equity analyst Michael Kim told Bloomberg in an interview before earnings were announced that "it was a mixed quarter for Invesco as it relates to flows" because proposed fund mergers stemming from the acquisition led to client withdrawals.
