Will Brookfield Asset Management Inc. (BAM)’s Earnings Top Expectations For Fourth Time In A Row?

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Brookfield Asset Management Inc. (USA) (NYSE:BAM) will be announcing its fourth quarter financial numbers on Friday before the bell. The last three quarters indicate that its earnings topped the Street analysts’ expectations by over 200%. Will it do it again in the fourth quarter? Though there is no major unfavorable news to impact its result, it is a tough call since its performance was either way ahead or way below.

For instance, in the 2013-fourth quarter, Brookfield Asset Management Inc. (USA) (NYSE:BAM)’s earnings missed by 64.7%. Though analysts’ estimate year-over-year growth in earnings, they don’t expect the same on the revenue. Sequentially also, the company might struggle.

Revenue Generation

Based on the third quarter results, two-thirds of the company’s revenues come from three primary divisions, property, residential development, and service activities. There are also other segments such as infrastructure, renewable energy, private equity, and asset management.

In terms of revenue contribution, Brookfield Asset Management Inc. (USA) (NYSE:BAM)’s property segment share was 26.3% in the third quarter, which was up from 25.2% in the preceding year quarter. Similarly, the service activities revenue share was 20.2%, which was more or less the same in the previous year quarter. However, its property development segment witnessed a growth of 62.5% in the third quarter, thereby allowing its share to surge to 19.8% from 12.6%. Therefore, these three divisions performance has always been crucial for the company.

As far as other divisions, private equity and renewable energy divisions were not able to deliver year-over-year growth in the third quarter. As a result, their share of revenue dipped. However, the infrastructure segment posted 11% growth and improved its share to 11.8% from 11.1% in the year earlier quarter.

Earnings Expectations

Street analysts’ seemed to have taken the weakness that the company was undergoing while estimating earnings of 32 cents a share and $4.55 billion revenue. On a year-over-year basis, EPS is predicted to surge 78% whereas revenue is projected to drop nearly 18%. In the previous year fourth quarter, Brookfield Asset Management Inc. (USA) (NYSE:BAM) earned 18 cents a share and $5.54 billion revenue.

Viraj Shah

Viraj Shah has completed M.Com (Finance) and is currently pursuing his CFP. He tracks US markets along with other global markets like India very closely. He is very passionate about stocks, real estate, and technology. He also believes that money can always be made in the market.

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