WASHINGTON (dpa-AFX) - Franklin Resources Inc. (BEN) on Wednesday reported a 5 percent increase in profit for the third quarter from last year on higher revenues that were partly offset by increases in operating expenses and taxes.
Both revenue and earnings per share for the quarter missed analysts' expectations. However, the company's assets under management increased 13 percent from last year.
San Mateo, California-based Franklin Resources is an asset management holding company that offers investment vehicles for clients, including individuals, institutions, pension plans, trusts and partnerships.
Net income attributable to the company for the third quarter was $578.9 million or $0.92 per share, up from $552.3 million or $0.86 per share in the year-ago period.
On average, 19 analysts polled by Thomson Reuters expected earnings per share of $0.95 for the quarter. Analysts' estimates typically exclude one-time items.
Operating revenues for the quarter grew 2 percent to $2.13 billion from $2.08 billion in the year-ago period. Analysts' consensus revenue estimate was $2.17 billion.
The company's investment management fees for the third quarter grew 6 percent from the year-ago period to $1.39 billion, while sales and distribution fees declined 3 percent to $643.7 million.
Shareholder servicing fees declined 11 percent to $69 million, while other revenues were flat with last year at $24.6 million.
Total operating expenses rose 2 percent from the prior-year period to $1.34 billion. Operating margin declined slightly to 36.9 percent from 37 percent in the same period last year.
Investment and other income soared to $107.6 million from $10.3 million in the prior-year period, while interest expenses increased 9 percent to $10.9 million. Taxes on income rose 20 percent to $251.4 million.
As at quarter-end, the company's total assets under management or AUM were $920.5 billion. AUM increased $105.5 billion or 13 percent year-on-year, chiefly due to $116.9 billion of market appreciation partly offset by $7.2 billion of net new outflows.
BEN is trading at $56.40, down $0.70 or 1.23 percent on a volume of 92,924 shares.
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