Earnings Recap: SEI Investments Co. (NASDAQ:SEIC)

SEI Investments Co. (NASDAQ:SEIC) reported earnings for the three months ended Mar2016 on April 20, 2016. The company earned $0.47 per share on revenue of $334.26M. Analysts had been modeling earning per share of $0.44 with $333.68M in revenue.

SEI Investments Co. (NASDAQ:SEIC) announced financial results for the first-quarter 2016.

First-Quarter Business Highlights:

• Revenue growth in the quarter was primarily driven by higher Asset management, administration, and distribution fees from improved cash flows from new and existing clients. The market volatility occurring during the second half of 2015 and early 2016 negatively impacted our asset-based fee revenues and partially offset our revenue growth.


• Sales events, net of client losses, during first-quarter 2016 totaled approximately $38.6 million and are expected to generate net annualized recurring revenues of approximately $33.2 million when contract values are fully realized.


• Our average assets under management, excluding LSV, increased $8.2 billion, or five percent, to $180.7 billion, as compared to $172.5 billion during the first-quarter 2015 (see attached Average Asset Balances schedules for further details).


• Our average assets under administration increased $20.0 billion, or five percent, to $404.7 billion in the first-quarter 2016, as compared to $384.7 billion during the first-quarter 2015 (see attached Average Asset Balances schedules for further details).


• Information processing and software servicing fees in our Private Banks segment increased $2.7 million in the first-quarter 2016 compared to the prior year period primarily due to increased assets from new and existing clients processed on the SEI Wealth Platform(SM).


• Our earnings from LSV decreased by $5.2 million, or 15 percent, to $29.2 million in first-quarter 2016 as compared to $34.3 million in first-quarter 2015. The decline in earnings was due to lower assets under management from unfavorable market conditions and reduced performance fees.


• We capitalized $9.5 million and $8.0 million of software development costs in first-quarter 2016 and 2015, respectively, of which $7.6 million and $7.3 million are related to continued enhancements to the SEI Wealth Platform.


• Amortization expense related to the SEI Wealth Platform increased to $11.0 million during the first-quarter 2016 as compared to $10.3 million during the first-quarter 2015 due to continued enhancements.


• Although revenues increased in our Investment Advisors and Investment Managers segments, higher personnel and other operating costs mainly related to servicing new and existing clients and increased technology development spending in these segments caused operating margins to decline.


• We recorded pre-tax gains of $2.8 million, or $.01 diluted earnings per share, from the sale of SEI Asset Korea in first-quarter 2016 and 2015.


• Our effective tax rates were 35.2 percent in first-quarter 2016 and 35.4 percent in first-quarter 2015.


• We repurchased 2.1 million shares of our common stock for $80.6 million during the first-quarter 2016.

SEI Investments Co. earnings per share showed an increasing trend of 5.9% for the current fiscal year. The company’s expected EPS growth rate for next fiscal year is 246%.Analysts project EPS growth over the next 5 years at 13.5%. It has EPS annual growth over the past 5 fiscal years of 9.9% when sales grew 8.2. It reported 2.7% sales growth, and -5.9% EPS decline in the last quarter.

The stock is trading at $51.44, up 60.7% from 52-week low of $32.01. The stock trades down -6.83% from its peak of $55.48 and 4.98% above the consensus price target of $54. Its volume clocked up at 0.92 million shares which is higher than the average volume of 0.79 million shares. Its market capitalization currently stands at $8.31B.