SEI Investments Company (NASDAQ: SEIC) stock fell over 4.5% on July 20th, 2018 (as of 10:40 AM GMT-4 ; Source: google finance) on lower than expected second quarter of FY 18.
During the second quarter of 2018, the noncash asset balances under management fell by $2.3 billion. At the same time, LSV assets under management decreased by $1.7 billion during the second quarter. These decreases in assets under management were due to the market depreciation
The company had reported the adjusted revenue growth of 9 percent to $404.8 million in the second quarter of FY 18. For the second quarter 2018, the net income grew 33percent to $121.6 million. During the second quarter, revenue growth was primarily driven by higher Asset management, administration, and distribution fees from market appreciation and positive cash flows from new and existing clients.
Moreover, during the second quarter, Information processing and software servicing fees in the Private Banks segment grew $3.3 million in second-quarter 2018 compared to second-quarter 2017 primarily due to increased assets from new and existing clients processed on the SEI Wealth Platform. Revenues from the SEI Archway acquisition were $5.6 million during the second-quarter 2018. SEI Archway was acquired during the third-quarter 2017. SEC’s average assets under management, excluding LSV, has risen nine percent, to $227.0 billion, as compared to $209.2 billion during the second-quarter 2017.
. In addition, during the second quarter 2018 the company has repurchased approximately 1.6 million shares of SEI stock at an average price of $64 per share. That translates to over $105 million of stock repurchases during the second quarter. Finally, in the second quarter, as part of the investments the company made to create growth, the company capitalized approximately $12 million of the SWP development and amortized approximately $9.9 million of previously capitalized SWP development. Second quarter 2018 sales events, net of client losses, totaled approximately $24.6 million and are expected to generate net annualized recurring revenues of approximately $19.1 million.
Meanwhile, the company has acquired Huntington Steele, LLC (Huntington Steele), which is a registered investment advisor servicing the ultra-high-net-worth market, during the second-quarter 2018. As a result, the ending advised assets as of June 30, 2018 increased by approximately $800 million, and the revenues and expenses increased by approximately $900 thousand and $700 thousand, respectively, during the second-quarter 2018.