Lazard's Q1 Earnings Beat Estimates on Y/Y Lower Expenses, Stock Down

Lazard Inc.’s LAZ first-quarter 2025 adjusted earnings per share of 56 cents beat the Zacks Consensus Estimate of 27 cents. However, this compared unfavorably with earnings of 66 cents per share in the year-ago quarter.

Lazard’s results were positively impacted by lower operating expenses. However, a decline in revenues in the financial advisory, asset management and corporate segments alongside lower assets under management (“AUM”) balance acted as a spoilsport.
 
In light of these negatives, shares of the company declined 3.1% on Friday’s trading session following the release of its first-quarter 2025 results.

Lazard’s net income (GAAP) was $60.4 million, which jumped 68.9% from the prior-year quarter's level.

Lazard’s Revenues Decrease Y/Y

Quarterly operating revenues were $643.2 million, which declined 13.8% year over year. Nonetheless, the top line surpassed the Zacks Consensus Estimate of $616 million.

Lazard’s Expenses Down

Operating expenses were $593.4 million, down 16.4% year over year.

The ratio of adjusted compensation expenses to operating revenues was 65.5, down from the year-earlier quarter’s 66. The ratio of adjusted non-compensation expenses to operating revenues was 23, up from the year-ago quarter’s 18.

Lazard’s Segmental Performance

Financial Advisory: The segment’s adjusted operating revenues were $369.5 million, down 17.3% from the year-earlier quarter.
 
Asset Management: Segmental adjusted operating revenues of $264.5 million decreased 4.1% from the prior-year quarter.
 
Corporate: Adjusted operating revenues from this segment were $9.1 million, down 61.9% from the year-earlier quarter.

LAZ’s AUM Declines

As of March 31, 2025, the total AUM was $227.4 billion, which decreased 9.2% from the prior-year quarter.
 
LAZ’s first quarter witnessed a market appreciation of $0.8 billion, foreign exchange appreciation of $3.9 billion and net outflows of $3.7 billion.
 
The average AUM in the reported quarter was $230.8 billion, down 6.5% year over year.

Lazard’s Balance Sheet Position Weakens

The company’s cash and cash equivalents totaled $908.6 million as of March 31, 2025, down 30.5% from the prior quarter. Stockholders’ equity was $648.6 million, down 5.3% sequentially.

LAZ’s Share Repurchase Update

In the reported quarter, Lazard repurchased 0.8 million shares at an average price of $46.73 per share.

As of March 31, 2025, roughly $164 million of authorization remained available for repurchase.

Our View on LAZ

Lazard’s increased dependence on advisory revenues and continued net outflows will affect its top-line growth in the upcoming period. Nonetheless, innovative investment strategies and strategic initiatives to mitigate costs will help profitability. However unfavorable debt/equity ratio will likely make capital distributions unsustainable.

Lazard, Inc. Price, Consensus and EPS Surprise

Lazard, Inc. price-consensus-eps-surprise-chart | Lazard, Inc. Quote

Currently, Lazard carries a Zacks Rank #5 (Strong Sell).

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Performances of Other Asset Managers

Invesco’s IVZ first-quarter 2025 adjusted earnings of 44 cents per share surpassed the Zacks Consensus Estimate of 39 cents. Moreover, the bottom line jumped 33.3% from the prior-year quarter. (Find the latest EPS estimates and surprises on Zacks Earnings Calendar.)

IVZ’s results were primarily aided by higher adjusted net revenues. An increase in the AUM balance due to decent inflows was positive too. However, higher adjusted operating expenses were woe.

BlackRock’s BLK first-quarter 2025 adjusted earnings of $11.30 per share handily surpassed the Zacks Consensus Estimate of $10.43. The figure reflects a rise of 15% from the year-ago quarter.

BLK’s results benefited from a rise in revenues. AUM witnessed robust growth and touched a record high of $11.58 trillion, driven by net inflows and favorable forex impact, partially offset by market depreciation. However, higher expenses and lower non-operating income were headwinds.

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This article originally published on Zacks Investment Research (zacks.com).

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