LAZ Stock Down as Q2 Earnings Lag on Higher Costs, Expands Buyback Plan

The results excluded certain non-recurring items. After considering those, Lazard’s net income attributable to the company (GAAP) was $4.8 million, which plunged 91.3% from the prior-year quarter.

Lazard’s Revenues Increase

Quarterly adjusted net revenues were $786.5 million, which increased 2.2% year over year. The top line surpassed the Zacks Consensus Estimate of $772.2 million by 1.8%.

Lazard’s Expenses Increase

Operating expenses increased 9.5% year over year to $770.1 million, due to higher compensation and non-compensation costs.

The ratio of adjusted compensation expenses to operating revenues was 69.9%, higher than 65.5% in the year-ago quarter.

The ratio of adjusted non-compensation expenses to operating revenues was 21.8%, up from 20.4% in the prior-year quarter.

The adjusted operating margin was 8.3%, down from 14.1% in the year-ago quarter.

Lazard’s Segmental Performance

Financial Advisory: The segment’s adjusted operating revenues were $445.3 million, down 9.4% from the year-ago quarter.

Asset Management: Segmental adjusted operating revenues of $331.3 million increased 23.4% year over year, driven by higher management fees, incentive fees and other revenues.

Corporate: Adjusted operating revenues from this segment were $9.8 million, down 1.8% from $10 million in the year-ago quarter.

LAZ’s AUM Position

As of June 30, 2026, total AUM was $284.7 billion, which increased 14.6% year over year.

The average AUM in the reported quarter was $279.1 billion, up 17% from the year-ago quarter.

Lazard’s Balance Sheet Position Improves

The company’s cash and cash equivalents totaled $1.1 billion as of June 30, 2026, up 7.7% from the prior quarter. Total stockholders’ equity was $914.3 million, up 3.6% from March 31, 2026.

LAZ’s Share Repurchase Update

In the second quarter of 2026, Lazard returned $103 million to shareholders. This included $49 million in dividends, $50 million in common stock repurchases and $4 million related to the satisfaction of employee tax obligations in lieu of share issuances upon the vesting of equity grants.

On July 22, 2026, Lazard’s board authorized an additional $200 million in share repurchases, bringing the total outstanding authorization to approximately $257 million. The authorization expires on Dec. 31, 2028.

Our View on LAZ

Lazard’s second-quarter 2026 performance reflects pressure from lower Financial Advisory revenues, elevated operating expenses and a substantially higher effective tax rate. However, robust growth in Asset Management revenues, higher AUM and continued progress under the Lazard 2030 strategy, which targets doubling revenues by 2030 and delivering average annual shareholder returns of 10-15%, remain encouraging.

Further, the Campbell Lutyens acquisition, anticipated to close in the second half of 2026, is expected to create a platform comprising more than 280 advisory professionals, generate nearly $500 million in revenues in 2027 and strengthen Lazard’s private capital advisory capabilities. The controlling stake in Elaia Partners also expands its presence in venture capital and private markets.

Currently, Lazard carries a Zacks Rank #5 (Strong Sell).

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Performance and Earnings Date of Other Asset Managers

Blackstone’s BX second-quarter 2026 distributable earnings of $1.52 per share outpaced the Zacks Consensus Estimate of $1.33. The figure soared 26% from the prior-year quarter.

BX’s results benefited from a rise in AUM and higher revenues. An increase in GAAP expenses was the undermining factor.

KKR & Co. Inc. KKR is set to report second-quarter 2026 results on July 30.

Over the past seven days, the Zacks Consensus Estimate for KKR & Co’s quarterly earnings has been revised lower to $1.42 per share. The estimated figure indicates a 20.3% rise from the prior-year quarter.

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This article originally published on Zacks Investment Research (zacks.com).

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