WisdomTree’s Q1 Revenue Falls 10% As Largest Funds Lose Assets

WisdomTree Investments, Inc. (NASDAQ:WETF) early Friday posted solid first quarter earnings results, as revenues plunged from year-ago levels, but showed improvement sequentially from Q4 2016.

The New York City-based ETF issuer reported Q1 earnings per share (EPS) of $0.05, which was in-line with the Wall Street consensus estimate of $0.05.

Revenues fell 10.3% from last year to $54.6 million, but still beat analysts’ view for $53.38 million.

WisdomTree blamed the revenue plunge on declines in its average assets under management (AUM), predominantly in its two largest funds. However, it did see $2.1 billion of net inflows into its U.S. Equity ETFs in Q1.

Revenues also rose on a sequential basis from the fourth quarter, up 7.5%, due to higher average AUM due to market appreciation. Meanwhile, WETF’s average U.S. advisory fees for U.S. listed ETFs in the latest period were 0.50%.

The company commented via press release:

“The evolution of the asset management industry is accelerating with several trends and market forces converging. We’ve been a pioneer since our founding more than a decade ago, first in building our veteran team, developing innovative products and extending our presence to other promising markets around the world. We are currently undertaking a number of initiatives to remain ahead of our competition and to benefit from the increasing inflows we expect to continue into the ETF market in the coming years.”

WisdomTree Investments, Inc. shares were mostly flat in premarket trading Friday. Year-to-date, WETF has declined -24.17%, versus a 7.21% rise in the benchmark S&P 500 index during the same period.

WETF currently has a StockNews.com POWR Rating of D (Sell), and is ranked #32 of 35 stocks in the Asset Management category.

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