Federated Hermes, Inc.’s FHI first-quarter 2026 earnings per share of $1.27 topped the Zacks Consensus Estimate of $1.20. The bottom line grew 1.6% from the year-ago quarter.
Higher net investment advisory fees, net administrative service fees and net other service fees are major driving factors. The company also achieved a record level of assets under management (AUM). However, the rise in expenses remained a headwind.
Net income was $96.4 million in the first quarter, down 4.7% from the year-ago quarter.
FHI’s Revenues & Expenses Rise
Total revenues increased 13.1% year over year to $478.96 million. The top line surpassed the Zacks Consensus Estimate by 0.17%.
Quarterly net investment advisory fees rose 11.1% year over year to $319.4 million.
Net other service fees grew 40.9% year over year to $49.3 million, and net administrative service fees rose 9.1% to $110.3 million.
In the first quarter, Federated Hermes derived 54% of its revenues from money-market assets, 45% from long-term assets and 1% from sources other than managed assets.
Total operating expenses increased 20.9% year over year to $352.6 million.
FHI recorded a net non-operating income of $3.4 million, down from $4.3 million in the prior-year quarter.
Federated Hermes’ Balance Sheet Position Solid
As of March 31, 2026, cash and other investments and total long-term debt were $645.4 million and $348.4 million, respectively. This compares to $724.3 million and $348.4 million, respectively, as of Dec. 31, 2025.
FHI’s Asset Position Solid
As of March 31, 2026, total managed assets were at a record level of $907.1 billion, up 8% year over year.
FHI reported record money-market assets of $684.7 billion, up 7% year over year. Fixed-income assets increased marginally to $99.8 billion.
Equity assets of $100.8 billion increased 25% from the prior-year quarter. Alternative/private market assets declined 2% year over year to $19 billion.
Average managed assets totaled $915.6 billion, up 9% year over year.
Federated Hermes’ Capital Distribution Update
The company repurchased 1,191,300 shares of its class B common stock in the reported quarter for $66 million.
Federated Hermes also declared a dividend of 38 cents per share, up 11.8% from the previous quarter. The dividend is payable May 15, 2026, to shareholders of record as of May 8, 2026.
Our Viewpoint on FHI
Federated Hermes delivered a strong quarter with solid growth in revenues and AUM, supported mainly by its money-market and equity asset segments. Although operating expenses rose, revenue growth helped maintain momentum. The balance sheet remains stable with manageable debt and healthy cash/investment positions. Continued asset growth places the firm in a favorable position amid investor demand for liquidity and diversification.
Federated Hermes, Inc. Price, Consensus and EPS Surprise
Federated Hermes, Inc. price-consensus-eps-surprise-chart | Federated Hermes, Inc. Quote
Currently, FHI carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Performances of Other Asset Managers
BlackRock’s BLK first-quarter 2026 adjusted earnings of $12.53 per share handily surpassed the Zacks Consensus Estimate of $11.96. The figure reflects a 10.9% rise from the year-ago quarter.
Results benefited from a rise in revenues. The AUM balance witnessed robust year-over-year growth, driven by net inflows. However, higher expenses were a headwind for BLK.
Blackstone’s BX first-quarter 2026 distributable earnings of $1.36 per share surpassed the Zacks Consensus Estimate of $1.33. The figure grew 25% from the prior-year quarter.
BX’s results benefited from a rise in the AUM balance and higher revenues. However, an increase in GAAP expenses was the undermining factor.
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This article originally published on Zacks Investment Research (zacks.com).