Macquarie shares climb despite earnings miss
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More news: Macquarie Group shares added more than 2% in morning trade despite reporting a softer-than-expected third-quarter result.
Macquarie shares were up 2.1% to $232.70 by midday AEDT, extending gains of nearly 25% over the last 12 months.
UBS analysts called the third-quarter update "a bit light" and appeared to run below consensus estimates. Commentary around the division performance during the quarter "reads mixed across the board", the analysts said.
What they said: "Another update and another earnings miss. But will the market care this time?" said UBS analysts.
Macquarie year-to-date profit 'broadly in line' with prior year
The news: Macquarie Group said its net profit after tax for nine months to 31 December was "broadly in line" with the prior corresponding period.
However, it flagged that its commodities and global markets (CGM), and Macquarie Capital arms' net profit contribution was "substantially down".
The numbers: Macquarie's annuity-style businesses Macquarie Asset Management (MAM) and banking and financial services (BFS) both reported growth quarter over quarter. MAM recorded a 3% rise in assets under management to $942.7 billion, while BFM saw total deposits rise 7% to $163.8 billion.
The context: Macquarie said the year-to-date net profit contribution from both MAM and BFS was "substantially up" on the prior corresponding period, primarily due to higher performance fees and investment income in MAM. Continued volume growth and lower operating expenses, partially offset by margin compression, drove an increased contribution in BFS.
However, Macquarie's markets-facing businesses CGM and Macquarie Capital reported a lower net profit contribution due to subdued conditions in certain commodity markets in CGM and the unfavourable impact of timing of income recognition on North American Gas and Power contracts.
Macquarie said it continues to maintain a "cautious stance, with a conservative approach to capital, funding and liquidity that positions us well to respond to the current environment".
The sources: ASX announcement, UBS research
