AllianceBernstein on Monday, August 2, reported disappointing second-quarter earnings due to global stock market weakness, with net income at $0.31 per unit versus $0.41 a year ago. Analyst consensus was for earnings of $0.41.
The asset management and research firm said in its second-quarter 2010 news release that stock markets fell during most of the period as investors feared that escalating fiscal troubles in Europe could curtail the world’s economic recovery.
Second-quarter profit fell 16%, with net income declining to $32.3 million from $38.3 million, and revenue fell 5% to $688 million from $721 million in the quarter ended June 30, 2009.
“Overall, the second quarter of 2010 was not what we would have liked,” said Peter Kraus, chairman and CEO of the New York-based company, an affiliate of French insurer Axa Group, in a statement. “Increased volatility around the globe, caused in large part by the European credit crisis, led many investors to seek safe havens and sell riskier assets–much as we saw in 2008.”
AllianceBernstein (AB) shares opened at $26.60 and rose to a high of $27.35, then settled into a range above $27.00 per unit in early afternoon trading.
The market dynamic had an adverse impact on AllianceBernstein’s equity services, which generally underperformed benchmarks, Kraus said.
“However,” he added, “we feel our equity portfolios are exposed to companies with very attractive cash flows and growth characteristics which should capitalize on global growth. Notably, the performance of our fixed income services remained competitive, resulting in the fourth consecutive quarter of net inflows.”
Net Outflows Add to Disappointing Performance