AllianceBernstein Holding L.P. Earnings: Income Rises, but Revenue Falls

AllianceBernstein Holding L.P. (NYSE:AB) reported net income above Wall Street’s expectations for the third quarter. AllianceBernstein Holding provides research, investment management, and related services globally to a range of clients.

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AllianceBernstein Earnings Cheat Sheet for the Third Quarter

Results: Net income for the asset management company rose to $107 million (26 cents per share) vs. $12.2 million (12 cents per share) in the same quarter a year earlier. This marks a substantial increase from the year earlier quarter.

Revenue: Fell 15% to $642 million from the year earlier quarter.

Actual vs. Wall St. Expectations: AB reported adjusted net income of 30 cents per share. By that measure, the company beat the mean estimate of 27 cents per share. It fell short of the average revenue estimate of $668.3 million.

Quoting Management: “The third quarter of 2011 was one of extreme volatility and uncertainty in the global markets,” said Peter S. Kraus, Chairman and Chief Executive Officer. “The escalation of Europe’s sovereign debt crisis, US debt ceiling debate and resulting S&P downgrade of US Treasuries, and further weakening in the US economy led to equity market declines not seen since the financial crisis, and hit the corporate and high yield fixed income markets hard as well. These conditions sidelined many investors. During the quarter we saw a decline in both gross sales and client redemptions.”

Key Stats:

The company topped expectations last quarter after falling short of forecasts in the second quarter with net income of 35 cents versus a mean estimate of net income of 40 cents per share.

Net income has increased more than twofold year over year on average across the last five quarters. The biggest gain came in the most recent quarter, when income climbed 776% from the year earlier quarter.

The company’s revenue has now risen for two straight quarters. In the second quarter, revenue increased 9.8% to $42.7 million from the year earlier quarter.

Looking Forward: Analysts appear increasingly negative about the company’s results for the next quarter. The average estimate for the fourth quarter has moved down from 42 cents a share to 27 cents over the last ninety days. The average estimate for the fiscal year is $1.29 per share, down from $1.62 ninety days ago.

Competitors to Watch: UBS AG (NYSE:UBS), Legg Mason, Inc. (NYSE:LM), Westwood Hldgs. Group, Inc. (NYSE:WHG), Artio Global Investors Inc. (NYSE:ART), Diamond Hill Investment Group, Inc. (NASDAQ:DHIL), Epoch Holding Corp (NASDAQ:EPHC), Sanders Morris Harris Group (NASDAQ:SMHG), Gamco Investors Inc. (NYSE:GBL), Pzena Investment Management, Inc. (NYSE:PZN), Goldman Sachs (NYSE:GS), Morgan Stanley (NYSE:MS), Bank of America (NYSE:BAC), Citigroup (NYSE:C), JP Morgan (NYSE:JPM) and Franklin Resources, Inc. (NYSE:BEN).

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(Source: Xignite Financials)