Subdued AUM Performance on Weak Markets to Hurt Invesco's Q1 Earnings

Core Viewpoint - Invesco (IVZ) is expected to report a year-over-year increase in both earnings and revenues for the first quarter of 2025, with results influenced by a decline in adjusted expenses and higher adjusted net revenues [1][10]. Financial Performance - Invesco's adjusted earnings in the last reported quarter exceeded the Zacks Consensus Estimate, supported by a decrease in adjusted expenses and an increase in assets under management (AUM) [1]. - The preliminary total AUM as of March 31, 2025, was $1.84 trillion, remaining stable sequentially [5]. - The Zacks Consensus Estimate for Invesco's earnings is 39 cents, reflecting an 18.2$1.1 billion, indicating a 4.9% rise [10]. Revenue Estimates - Investment management fees are projected to decline to $1.11 billion, a decrease of 1.5$7 million, a 79.4% decrease from the prior quarter [6]. - Service and distribution fees are estimated to remain unchanged at $381 million, while other revenues are expected to rise by 3.9$53 million [6]. Cost Management - Invesco's cost-saving initiatives are anticipated to enhance efficiency, but rising compensation and marketing costs may negatively impact overall expenses [7]. - Management expects one-time implementation costs of the Alpha initiative to be around $10-15 million in Q1 2025, leading to a modest increase in overall expenses [7]. Earnings Surprise History - Invesco has a mixed earnings surprise history, surpassing the Zacks Consensus Estimate in two of the last four quarters, meeting once, and lagging once, with an average surprise of -0.97% [2]. - The current Earnings ESP for Invesco is -0.64%, and it holds a Zacks Rank of 4 (Sell), indicating low chances of beating the consensus estimate this time [8][9].