Asset management firm Invesco (IVZ 0.53%) reported a drop in earnings and a net outflow in the first quarter. The Atlanta-based firm also slashed its quarterly dividend in half.
Net income was down 54% year over year to $81.5 million while earnings per share fell 39% to $0.34. The company reported net outflows of $2.1 billion, compared to $3.5 billion in net inflows in Q1 2019. Bad as that latest result was, it was still far better than Q4 2019, when the company hemorrhaged $20.4 billion in net outflows.
The improvement came almost entirely from institutional money market funds, which contributed $26.3 billion in inflows in the quarter. Passive funds had $1.5 billion in net inflows, while active funds experienced $20.6 billion in outflows. Overall, the company had a record $84.7 billion in gross fund inflows in the quarter, more than offset by $103.8 billion in gross outflows.
"Despite the extreme market volatility, total gross long-term inflows increased nearly 40% versus the prior quarter to a record $84.7 billion, resulting in strong net flows into a number of diverse areas, including institutional, our China JV, money market funds, EMEA ETFs and global fixed income," President and CEO Marty Flanagan said.
Invesco had $1.05 trillion in assets under management at the end of the quarter, up 10% from a year ago, but down 14% from the end of the fourth quarter.
Flanagan said the company was managing expenses and strengthening its balance sheet through the coronavirus crisis. Invesco reported that is had cut operating expenses by 10% in the quarter to $1.28 billion and reduced its quarterly dividend from $0.31 to $0.15 per share. These steps will help enhance liquidity and create more operating flexibility.
The stock was up about 5.5% in mid-afternoon trading Friday, while the broader market was essentially flat.