Latest news with #OperatingEarnings
Yahoo
7 days ago
- Business
- Yahoo
KKR & Co Inc (KKR) Q2 2025 Earnings Call Highlights: Record Fee-Related Earnings and ...
Fee-Related Earnings: $0.98 per share. Total Operating Earnings: $1.33 per share. Adjusted Net Income: $1.18 per share. Management Fees: $996 million, up 18% year-over-year. Total Transaction and Monitoring Fees: $234 million. Capital Markets Transaction Fees: $200 million. Fee-Related Performance Revenues: $54 million, up 45% year-over-year. Fee-Related Earnings Margin: 69%. Insurance Segment Operating Earnings: $278 million. Strategic Holdings Operating Earnings: $29 million. Realized Performance Income: $419 million. Realized Investment Income: $154 million. Private Equity Portfolio Performance: Up 5% in the quarter, 13% over the last 12 months. Opportunistic Real Estate Portfolio Performance: Up 3% in the quarter, 7% over the last 12 months. Infrastructure Performance: Up 3% in the quarter, 14% over the last 12 months. Leverage Credit Composite Performance: Up 2% in the quarter, 7% over the last 12 months. Alternative Credit Composite Performance: Up 1% in the quarter, 9% over the last 12 months. Capital Deployed Year-to-Date: Nearly $37 billion. Uncalled Capital: $115 billion. Realized Performance and Investment Income (Last 12 Months): $2.6 billion, up over 20% year-over-year. Unrealized Carried Interest: $9.2 billion, up 30% year-over-year. Pending Monetization Revenue: Over $800 million. Capital Raised in Q2: $28 billion. Asset-Based Finance Commitments: $6.5 billion. Asset-Based Finance AUM Growth: Over 20% year-over-year to $75 billion. K-Series AUM: $25 billion as of June 30, up from $11 billion a year ago. Funding Agreements Issued: Approximately $2.5 billion with a weighted average duration of eight years. Japan Post Insurance Commitment: $2 billion through a new vehicle managed by Global Atlantic. Third-Party Capital Capacity: Approximately $6 billion. Warning! GuruFocus has detected 8 Warning Signs with KKR. Release Date: July 31, 2025 For the complete transcript of the earnings call, please refer to the full earnings call transcript. Positive Points KKR & Co Inc (NYSE:KKR) reported record-high fee-related earnings of $0.98 per share, total operating earnings of $1.33 per share, and adjusted net income of $1.18 per share. Management fees increased by 18% year-over-year, driven by the activation of Americas XIV and broader fundraising initiatives. The company has a strong pipeline for deployment in the second half of 2025, with $115 billion of uncalled capital. KKR & Co Inc (NYSE:KKR) raised $28 billion in capital during Q2, with significant growth in asset-based finance (ABF) commitments. The acquisition of a majority stake in HealthCare Royalty Partners expands KKR's life sciences footprint, adding approximately $3 billion in largely perpetual AUM. Negative Points Despite strong performance, the Insurance segment's operating earnings were only modestly ahead of expectations, indicating potential volatility in future quarters. The company faces challenges in the competitive private wealth space, with K-FIT still in early stages despite recent progress. Strategic buyers remain hesitant to acquire sponsor-backed companies, potentially impacting KKR's realization activities. The macroeconomic environment remains uncertain, which could affect future fundraising and investment activities. KKR's growth in management fees may face headwinds if market conditions change or if there are delays in fund activations. Q & A Highlights Q: Can you update us on the fundraising front for K-FIT and how it differentiates itself in the private wealth space? A: Craig Larson, Investor Relations, explained that KKR's K-Series has grown significantly, with assets under management increasing from $11 billion to $25 billion over the past year. K-FIT, specifically, has seen progress in fundraising, with a focus on asset-based finance to differentiate itself. The firm is converting KCOP to K-ABF, an asset-based finance-focused vehicle, contingent on a proxy with KCOP shareholders. Q: How are institutional clients responding to the current fundraising environment, and what is KKR's outlook? A: Scott Nuttall, Co-CEO, noted that KKR has raised $109 billion in the last 12 months, with a target of over $300 billion for 2024-2026. Institutional investors are returning to business as usual, with strong interest in infrastructure, private credit, and asset-based finance. KKR is seeing more strategic partnership dialogues and multiproduct discussions, which align with their strengths. Q: Can you discuss the opportunities in asset-based finance (ABF) and the Harley-Davidson deal? A: Craig Larson highlighted that KKR's ABF business has grown significantly, with $75 billion in AUM and a 20% year-over-year growth rate. The Harley-Davidson deal exemplifies a trend where companies opt for capital-light models, freeing up capital for strategic initiatives. KKR sees a strong environment for ABF, with similar opportunities expected in the future. Q: What are the key drivers for KKR's earnings growth over the next 12 to 18 months? A: Robert Lewin, CFO, outlined several drivers, including strong management fee growth, capital markets momentum, and fee-related performance revenue. KKR has $17.1 billion in embedded gains, a record high, which positions the firm well for future earnings growth. Strategic Holdings is also expected to contribute more significantly to operating earnings. Q: How is KKR positioned to benefit from potential 401(k) retirement reform? A: Craig Larson explained that KKR is encouraged by discussions to make private market investments more accessible to US retirement plans. The firm sees a significant long-term opportunity in the $40 trillion US retirement market, particularly in target date funds. KKR believes its brand, track record, and investment expertise will be advantageous as this opportunity unfolds. For the complete transcript of the earnings call, please refer to the full earnings call transcript. This article first appeared on GuruFocus.
France 24
31-07-2025
- Business
- France 24
US tariffs corrode steelmaker ArcelorMittal's profitability
Net profit for the period from January through June rose 39 percent from the same period in 2024 to hit $2.6 billion, thanks to a $1.7 billion exceptional gain from acquiring a stake in a US unit ceded by Nippon Steel. But operating earnings that strip out interest costs, depreciation and taxes, slid by 10 percent to $3.4 billion, notably due to US tariffs on steel imports. US President Donald Trump doubled tariffs on steel and aluminium to 50 percent at the beginning of June, including on its neighbour Canada which is the largest foreign supplier to the United States, as well as Mexico. ArcelorMittal says its global footprint, it produces steel in 15 countries and serves customers in 129, enables it to benefit from high-growth markets such as India and Brazil. However the introduction of US steel tariffs complicates ArcelorMittal's operations in North America, where it has factories in Canada, Mexico and the United States. First half sales slid 5.5 percent to $30.7 billion, but that 7.5 percent drop in average steel prices. "The underlying strength of the business is good, but like every company we must navigate the backdrop of ongoing geopolitical and tariff disruptions," chief executive Aditya Mittal said in a statement. "Despite the many challenges facing global business today, I am confident that ArcelorMittal has a profile that will enable us to continue to grow and thrive," he added. Mittal said gaining full ownership in Calvert by acquiring the stake from Nippon Steel strengthens its capabilities to produce high-quality steel products for a range of customers including the automotive industry. He urged the European Union to detail the measures it plans to take to protect its market from a flood of cheap Chinese steel imports. "It remains a crucial year for European steelmaking, and I sincerely hope that Europe will hold good onto its commitment to defend and prioritize its domestic steel industry," said Mittal. He added that the trend in Europe to boost government spending on defence and infrastructure was positive for the steel industry. ArcelorMittal's shares slumped 3.9 percent in Paris where the CAC 40 index was up 0.4 percent. © 2025 AFP
Yahoo
26-07-2025
- Business
- Yahoo
Eastern Bankshares Inc (EBC) Q2 2025 Earnings Call Highlights: Strong Growth in Earnings and ...
Operating Earnings: $81.7 million, a 21% increase from the first quarter. Net Interest Margin: Expanded by 21 basis points to 3.59%. Operating Efficiency Ratio: Improved to 50.8%. Operating Return on Average Assets: Increased by 21 basis points to 1.3%. Operating Return on Average Tangible Equity: Increased from 11.7% to 13.6%. Total Assets: $25.5 billion, up 2% from March 31. Tangible Book Value Per Share: Increased 4% to $12.53. Loan Growth: 8% annualized growth this quarter. Deposits Growth: 8% annualized growth. Assets Under Management: Reached a record high of $8.7 billion. Net Income: $100.2 million or $0.50 per diluted share. Operating Earnings Per Share: $0.41, a 21% increase from the previous quarter. Net Interest Income: $202 million, or $206.8 million on an FTE basis, a 7% increase from Q1. Non-Interest Income: $42.9 million, compared to a non-interest loss of $236.1 million in Q1. Non-Interest Expense: $137 million, an increase of $6.8 million from the first quarter. Period End Deposits: $21.2 billion, an increase of $424 million from the prior quarter. Period End Loans: Increased by $385 million, led by commercial lending. Allowance for Loan Losses: $232 million or 127 basis points of total loans. Non-Performing Loans: Decreased to $54.7 million or 30 basis points of total loans. Provision for Loan Losses: $7.6 million, up from $6.6 million in the prior quarter. Full Year Loan Growth Outlook: Raised to 3% to 5%. Full Year Deposit Growth Expectation: Lowered to 0% to 1%. Net Interest Income Guidance: $810 million to $820 million. Operating Fee Income Forecast: Increased to $145 million to $150 million. Operating Non-Interest Expense Forecast: $530 million to $540 million. Operating Tax Rate: Revised to 21% to 22%. Warning! GuruFocus has detected 6 Warning Signs with COLFF. Release Date: July 25, 2025 For the complete transcript of the earnings call, please refer to the full earnings call transcript. Positive Points Eastern Bankshares Inc (NASDAQ:EBC) reported strong second quarter results with operating earnings of $81.7 million, a 21% increase from the first quarter. Net interest margin expanded by 21 basis points to 3.59%, and the operating efficiency ratio improved to 50.8% due to higher revenues and effective expense management. Total assets reached $25.5 billion, up 2% from March 31, with tangible book value per share increasing by 4% to $12.53. Deposits grew at an annualized rate of 8%, with stable deposit costs, highlighting disciplined pricing and a favorable deposit mix. Credit trends remained positive, with non-performing loans improving for the second consecutive quarter and no net charge-offs reported. Negative Points The competitive market for deposits has intensified, impacting the bank's ability to maintain favorable deposit costs. The bank's outlook for deposit growth has been lowered to 0% to 1%, down from the previous range of 1% to 2%. The net interest income guidance has been modestly reduced due to lower average deposit balances. Non-interest expense increased by $6.8 million from the first quarter, driven by higher operating expenses and merger-related costs. The bank remains cautious about economic uncertainties and evolving policies that could impact customers. Q & A Highlights Q: Is it likely that we'll see more securities portfolio restructurings in coming quarters, excluding any related to the Harbor One deal? A: Possibly. We prioritize organic growth, share buybacks, and balance sheet management, including portfolio repositioning. However, due to the merger and the expiration of our current authorization, restructuring is on the back burner for now. - David Rosato, Chief Financial Officer Q: What drove the significant drop in non-performing loans (NPLs) this quarter? Were there any loan sales involved? A: The drop was due to our managed asset group resolving five credits during the quarter, not through loan sales. - David Rosato, Chief Financial Officer Q: Following the Harbor One deal, is there a plan to expand into new markets like Southern Rhode Island, Connecticut, or New York? A: We plan to build out in the Rhode Island market but have no current plans to expand banking services into Connecticut or New York. We already have a presence in Connecticut for wealth management. - Denis Sheahan, Chief Executive Officer Q: Can you provide more details on the strong CNI growth this quarter? What type of customers were involved, and were these new customers or existing ones utilizing more credit? A: It's a combination of both. We're seeing increased confidence from our customer base and have been adding talent in our commercial lending division. The growth is broad-based across all verticals within CNI. - Denis Sheahan, Chief Executive Officer and David Rosato, Chief Financial Officer Q: What is the outlook for the net interest margin in the back half of the year? A: The margin is expected to be relatively flat. Factors include core deposit growth, the impact of securities repositioning, and competitive deposit markets. Accretion income is unpredictable and could affect the margin. - David Rosato, Chief Financial Officer Q: How should we think about the rabbi trust income and its impact on fee income and expenses for the full year? A: Positive equity markets lead to positive rabbi trust income. If markets remain steady, the rabbi trust income and expense won't significantly impact the financials. - David Rosato, Chief Financial Officer Q: Are any of the $118 million in criticized office loans maturing in the next four quarters? A: Yes, there is one criticized loan maturing within the next year. However, there are no non-performing loans or non-accruing loans in the next year's maturities. - David Rosato, Chief Financial Officer Q: Regarding the FASB's proposed ASU on the CECL double count, what will the tangible book pickup look like, and will you be an early adopter? A: If finalized, we plan to early adopt, which applies only to Harbor One. The impact is a 1% to 1.5% reduction in tangible book value dilution and a slight reduction in earn-back time. - David Rosato, Chief Financial Officer For the complete transcript of the earnings call, please refer to the full earnings call transcript. This article first appeared on GuruFocus. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
