Eaton Vance Corp. (NYSE:EV) Q2 2020 Earnings Conference Call - Final Transcript

May 20, 2020 • 11:00 am ET

Previous

Eaton Vance Corp. (NYSE:EV) Q2 2020 Earnings Conference Call - Final Transcript

Share
Close

Loading Event

Loading Transcript

Presentation
Executive
Thomas E. Faust

our trading and operations teams have consistently kept that with unprecedented demand, even while working from home.

We don't take these successes for granted and recognize that our ability to respond to changing market conditions is a tribute to the planning and hard work of our technology and operations teams, the commitment and discipline of our employees as a whole and the strength of our corporate culture. Our resiliency is also testament to the stability and longevity of our relationships with critical operations and distribution business partners and the benefits of a workforce, where turnover is low and working relationships are long established. From a distribution standpoint, our sales teams have adapted quickly to a world of virtual interactions with clients and intermediaries.

With business travel shut down and in-person meetings canceled across the Board, we are leveraging digital communications tools to remain connected. We have dialed-up our digital engagement with financial advisors and consultants increasing the frequency of calls, webinars and blog posts. We increased the update frequency of our popular monthly market monitor to weekly, in order to help clients and business partners stay abreast of the markets and stay informed about Eaton Vance strategies. And we are leveraging the Eaton Vance Advisor Institute to provide financial advisors with invaluable advice for connecting with clients in these unprecedented times.

Financially, Eaton Vance's longstanding commitment to maintaining a strong balance sheet and ample liquidity has been well rewarded. As of April 30, we had over $950 million of cash, cash equivalents and short-term income investments, $300 million of available capacity on our corporate credit facility and no debt maturing until 2023. Over the course of the quarter, we successfully demonstrated our ability to generate incremental liquidity, if needed, and continue to closely monitor our financial resources on a daily basis. In terms of capital management, we slowed the pace of share repurchases during the fiscal second quarter to maintain an ample supply of dry powder. During the quarter, we prioritized spending on initiatives that support future growth and create operational efficiencies.

Turning to our financial results. Earlier today, we reported adjusted earnings per diluted share of $0.80 for the second quarter of fiscal 2020, unchanged from the second quarter of fiscal 2019 and down 6% from $0.85 of adjusted earnings per diluted share in the first quarter of fiscal 2020. Adjusted earnings differ from our earnings under US GAAP, principally to remove gains and losses, and other impacts of consolidated investment entities and the company's other seed capital investments. Adjusted earnings also reflect the reversal of net excess tax benefits related to the company's stock-based compensation. Combined, these adjustments added $0.15 to adjusted earnings per diluted share in the second quarter of fiscal 2020, subtracted $0.09 per diluted share in the second quarter of fiscal 2019 and subtracted $0.06 per diluted share in the first quarter of fiscal 2020.

By any measure, financial markets were challenging to navigate over the first two months of our second fiscal quarter as