SEI Investments (NASDAQ: SEIC) reported Q1 EPS of $0.73, $0.02 worse than the analyst estimate of $0.75. Revenue for the quarter came in at $400.82 million versus the consensus estimate of $403.49 million.

"Our first-quarter earnings reflect the recovery from the financial markets' swoon in late 2018, offset by reduced processing fees from non-recurring activities and a higher tax rate. While our net sales results for the quarter were down, our company's new sales activities, which are not reflected in first-quarter close results, are robust, and we expect they will translate into stronger levels in the future," said Alfred P. West, Jr., SEI Chairman and CEO.

"As we continue to advance our industry's modernization, SEI hit a key milestone with the completion of the Investment Advisors segment's migration, as well as additional client conversions, to the SEI Wealth PlatformSM late in the quarter. While keeping our focus on costs and profitability, we continue making key investments in our company to enhance long-term growth and shareholder value."

First-Quarter Business Highlights:

• Revenues from Asset management, administration, and distribution fees decreased due to lower assets under management from the carryover effect of the downturn in the capital markets during the fourth-quarter 2018, negatively impacting our asset-based fee revenues; however, this decrease was partially offset by increased fees from higher assets under administration, resulting from positive cash flows from new and existing clients in our Investment Managers segment.
• Our average assets under management, excluding LSV, decreased $10.4 billion, or four percent, to $223.2 billion, as compared to $233.6 billion during the first-quarter 2018 (see attached Average Asset Balances schedules for further details).
• Our average assets under administration increased $63.9 billion, or 12 percent, to $594.2 billion in the first-quarter 2019, as compared to $530.3 billion during the first-quarter 2018 (see attached Average Asset Balances schedules for further details).
• Our Subadvisory, distribution and other asset management costs decreased in first-quarter 2019, primarily from lower assets under management due to the previously described unfavorable market conditions.
• Sales events, net of client losses, during first-quarter 2019 totaled approximately $6.2 million and are expected to generate net annualized recurring revenues of approximately $1.2 million when contract values are fully realized. Sales events were lower than normal due to client loss activity in our Institutional Investors segment, flat cash flows across our Investment Advisors and Private Banks segments, limited positive sales activity in our Private Banks segment, and solid sales in our Investment Managers segment.
• Our earnings from LSV decreased by $3.3 million, or eight percent, to $37.3 million in first-quarter 2019 as compared to $40.6 million in first-quarter 2018. The decrease in earnings was primarily due to a decline in assets under management from the market conditions in fourth-quarter 2018, as well as reduced performance fees earned by LSV.
• Our operating expenses during the first-quarter 2019 increased. These expenses, primarily personnel costs, generally consist of operational, technology development and maintenance, and marketing costs, and are mainly related to our solutions offerings, as well as servicing existing clients and acquiring new clients. The Company incurred severance expense during the quarter of approximately $4.0 million, all recorded in corporate overhead expenses.
• We capitalized $9.7 million of software development costs in first-quarter 2019 for continued enhancements to the SEI Wealth Platform.
• Our effective tax rates were 22.1 percent in first-quarter 2019 and 11.9 percent in first-quarter 2018. The increase in our effective tax rate was primarily due to reduced tax benefits from a lower volume of stock option exercise activity during the quarter as compared to the prior year period.
• We repurchased 1.7 million shares of our common stock for $88.8 million during the first-quarter 2019.

For earnings history and earnings-related data on SEI Investments (SEIC) click here.