By Svea Herbst-Bayliss and Joseph Giannone
BOSTON/NEW YORK, April 23 (Reuters) - U.S. money managers Janus Capital Group Inc and Invesco Ltd reported surprisingly weak quarterly profits on Thursday as stock market declines and investment losses carved into revenue.
Federated Investors Inc, relying on its stable of funds that appeal during turbulent markets, earned more during the quarter, but not enough to overshadow a $20.1 million charge that resulted in lower profit.
The three companies also showed that the tide of money flowing out of the industry may be turning after a punishing year of record withdrawals from stock and bond mutual funds during the financial crisis and turbulence in global markets.
Atlanta-based Invesco took in $9.3 billion in new client money in its first-quarter to March 31, a reversal from $2.0 billion in outflows in the fourth quarter.
Denver-based Janus, known for growth stock funds, said only $900 million was pulled from its equity and bond portfolios after $3 billion of withdrawals in the final quarter of 2008.
Pittsburgh-based Federated Investors reported $1.1 billion of new flows into its fixed income funds, a dramatic improvement from $159 million in outflows during the fourth quarter. Investors withdrew $266 million from Federated's stock funds during the quarter, less than the $721 million they removed in the fourth quarter.
Federated Investors does not report flows into or out of its money market funds, which make up the bulk of assets.
'The industry has stabilized,' Janus Chief Executive Gary Black said in a telephone call with analysts and reporters, adding that he expected inflows to improve at other firms with better returns.
Janus shares gained 7.6 percent to close at $9.46. Invesco added 1.23 percent to end at $15.66 while Federated's shares closed 4 percent higher at $23.56.
A day earlier, Baltimore mutual fund manager T. Rowe Price Group Inc reported $4.5 billion in inflows, while AllianceBernstein Holding LP saw another $20 billion of outflows, but said they would improve.
But better inflows were not enough to offset a squeeze on earnings from sliding asset values at Janus and Invesco. The industry generates the bulk of its revenues on fee income based on a percentage of assets under management, which have tumbled.
First-quarter profit at Janus slumped 93 percent as net income fell to $2.7 million, or 2 cents per share. The result excludes a non-cash charge that could reach $1 billion from the value of assets acquired when Janus restructured in 2001.
Analysts had expected stronger earnings of 7 cents per share, according to Reuters Estimates. Revenue dropped 39 percent to $170.3 million from a year earlier as assets under management slid 40 percent to $110.9 billion.
Janus's stock, among the cheapest of its peers, rose 9.46 percent from January through Wednesday, slightly better than Invesco's 7.13 percent gain in the same period.
Invesco missed its projected earnings by a wider margin, reporting net income of $30.7 million, or 8 cents a share.
Analysts had expected earnings of 14 cents a share at the company, which owns investment firms AIM, Invesco, PowerShares and WL Ross. A year earlier, it reported net income of $155.2 million, or 39 cents a share.
Operating revenue fell to $548.6 million from $910.4 million, while assets under management fell 26 percent to $348.2 billion from $476.6 billion a year ago.
Federated Investors, whose fund managers include Hans Utsch and David Tice, said net income fell to $35.1 million, or 34 cents a share, from $55.8 million or 54 cents a share while revenue rose 2 percent to $310.6 million.
The company also recorded a charge of $20.1 million, or 13 cents a share, related to intangible assets associated with certain acquisitions. It also recorded $1.5 million, or 1 cent per share, for noncash share-based compensation expenses.
Assets under management, which are used to calculate fees, climbed to $409.2 billion from $338.5 billion a year ago and from $407.3 billion at the end of the fourth quarter.
Federated declared a quarterly dividend of 24 cents a share which it will pay on May 15 to shareholders of record on May 8.
(With additional reporting by Jonathan Spicer in New York. Editing by Jason Szep, Andre Grenon, Leslie Gevirtz) Keywords: ASSETMANAGERS/ (Svea.Herbst@Reuters.com +1 617 856 4331; Reuters Messaging: svea.herbst.reuters.com@reuters.net) COPYRIGHT Copyright Thomson Reuters 2009. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.
BOSTON/NEW YORK, April 23 (Reuters) - U.S. money managers Janus Capital Group Inc and Invesco Ltd reported surprisingly weak quarterly profits on Thursday as stock market declines and investment losses carved into revenue.
Federated Investors Inc, relying on its stable of funds that appeal during turbulent markets, earned more during the quarter, but not enough to overshadow a $20.1 million charge that resulted in lower profit.
The three companies also showed that the tide of money flowing out of the industry may be turning after a punishing year of record withdrawals from stock and bond mutual funds during the financial crisis and turbulence in global markets.
Atlanta-based Invesco took in $9.3 billion in new client money in its first-quarter to March 31, a reversal from $2.0 billion in outflows in the fourth quarter.
Denver-based Janus, known for growth stock funds, said only $900 million was pulled from its equity and bond portfolios after $3 billion of withdrawals in the final quarter of 2008.
Pittsburgh-based Federated Investors reported $1.1 billion of new flows into its fixed income funds, a dramatic improvement from $159 million in outflows during the fourth quarter. Investors withdrew $266 million from Federated's stock funds during the quarter, less than the $721 million they removed in the fourth quarter.
Federated Investors does not report flows into or out of its money market funds, which make up the bulk of assets.
'The industry has stabilized,' Janus Chief Executive Gary Black said in a telephone call with analysts and reporters, adding that he expected inflows to improve at other firms with better returns.
Janus shares gained 7.6 percent to close at $9.46. Invesco added 1.23 percent to end at $15.66 while Federated's shares closed 4 percent higher at $23.56.
A day earlier, Baltimore mutual fund manager T. Rowe Price Group Inc reported $4.5 billion in inflows, while AllianceBernstein Holding LP saw another $20 billion of outflows, but said they would improve.
But better inflows were not enough to offset a squeeze on earnings from sliding asset values at Janus and Invesco. The industry generates the bulk of its revenues on fee income based on a percentage of assets under management, which have tumbled.
First-quarter profit at Janus slumped 93 percent as net income fell to $2.7 million, or 2 cents per share. The result excludes a non-cash charge that could reach $1 billion from the value of assets acquired when Janus restructured in 2001.
Analysts had expected stronger earnings of 7 cents per share, according to Reuters Estimates. Revenue dropped 39 percent to $170.3 million from a year earlier as assets under management slid 40 percent to $110.9 billion.
Janus's stock, among the cheapest of its peers, rose 9.46 percent from January through Wednesday, slightly better than Invesco's 7.13 percent gain in the same period.
Invesco missed its projected earnings by a wider margin, reporting net income of $30.7 million, or 8 cents a share.
Analysts had expected earnings of 14 cents a share at the company, which owns investment firms AIM, Invesco, PowerShares and WL Ross. A year earlier, it reported net income of $155.2 million, or 39 cents a share.
Operating revenue fell to $548.6 million from $910.4 million, while assets under management fell 26 percent to $348.2 billion from $476.6 billion a year ago.
Federated Investors, whose fund managers include Hans Utsch and David Tice, said net income fell to $35.1 million, or 34 cents a share, from $55.8 million or 54 cents a share while revenue rose 2 percent to $310.6 million.
The company also recorded a charge of $20.1 million, or 13 cents a share, related to intangible assets associated with certain acquisitions. It also recorded $1.5 million, or 1 cent per share, for noncash share-based compensation expenses.
Assets under management, which are used to calculate fees, climbed to $409.2 billion from $338.5 billion a year ago and from $407.3 billion at the end of the fourth quarter.
Federated declared a quarterly dividend of 24 cents a share which it will pay on May 15 to shareholders of record on May 8.
(With additional reporting by Jonathan Spicer in New York. Editing by Jason Szep, Andre Grenon, Leslie Gevirtz) Keywords: ASSETMANAGERS/ (Svea.Herbst@Reuters.com +1 617 856 4331; Reuters Messaging: svea.herbst.reuters.com@reuters.net) COPYRIGHT Copyright Thomson Reuters 2009. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.