Research Desk Line-up: Janus Henderson Post Earnings Coverage
LONDON, UK / ACCESSWIRE / November 20, 2017 / Pro-Trader Daily has just published a free post-earnings coverage on Legg Mason, Inc. (NYSE: LM), which can be viewed by registering at http://protraderdaily.com/optin/'symbol=LM, following the Company's reporting of its second quarter fiscal 2018 operating results on October 25, 2017. The money manager surpassed top- and bottom-line expectations. Our daily stock reports are accessible for free, and with those to look forward today you also will be signing up for a complimentary member's account at:
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Get more of our free earnings reports coverage from other constituents of the Asset Management industry. Pro-TD has currently selected Janus Henderson Group PLC (NYSE: JHG) for due-diligence and potential coverage as the Company published on November 09, 2017, its financial results for Q3 2017 which ended on September 30, 2017. Register for a free membership today, and be among the early birds that get access to our report on Janus Henderson when we publish it.
At Pro-TD, we make it our mission to bring you news that matter about the stock you follow. Today, our research desk covers a blog story on LM; also brushing on JHG. With the links below you can directly download the report of your stock of interest free of charge at:
http://protraderdaily.com/optin/'symbol=LM
http://protraderdaily.com/optin/'symbol=JHG
Earnings Reviewed
For the second fiscal quarter ended September 30, 2017, Legg Mason's operating revenues grew 3% to $768.3 million compared to operating revenues of $748.4 million in Q2 FY17, reflecting growth principally due to higher average long-term Asset Under Management (AUM), and an increase in non-pass through performance fees of $14.8 million. The Company's revenue topped analysts' estimates of $739.1 million.
For Q2 FY18, Legg Mason's operating expenses of $623.9 million were up 1% compared to $620.7 million in Q2 FY17, reflecting increased compensation, excluding acquisition and transition-related charges of $5.3 million. The prior year's same quarter included a contingent consideration credit adjustment of $7.0 million and a $4.8 million gain in the market value of deferred compensation.
During Q2 FY18, Legg Mason's non-operating expense was $18.1 million compared to $11.2 million in the prior year's same quarter. The Company's operating margin for the reported quarter was 18.8% compared to 17.1% in the prior year's same quarter. Legg Mason's adjusted operating margin was 24.9% compared to 22.7% in Q2 FY17.
Legg Mason's net income was $75.7 million, or $0.78 per diluted share, for Q2 FY18 compared to net income of $66.4 million, or $0.63 per diluted share, in Q2 FY17. The increased earnings were driven by higher average long-term AUM, higher non-pass through performance fees and lower acquisition and transition-related costs. The Company's earnings exceeded Wall Street's expectation of $0.68 per share.
Assets Under Management
At September 30, 2017, Legg Mason's AUM were $754.4 billion compared to $741.2 billion at June 30, 2017, resulting from $12.5 billion in positive market performance and other aspects, $2.2 billion in positive foreign exchange and liquidity inflows of $0.2 billion, partially offset by long-term outflows of $1.2 billion.
At September 30, 2017, the Company's fixed income represented 54% of AUM, while equity represented 27%, liquidity represented 10%, and alternatives represented 9%. On a geographical basis, 68% of AUM was from clients domiciled in the United States and 32% from non-US domiciled clients.
Legg Mason's average AUM was $750.3 billion during Q2 FY18 compared to $740.3 billion in the prior quarter and $742.1 billion in Q2 FY17. The Company's average long-term AUM was $675.1 billion in the reported quarter compared to $658.7 billion in the prior quarter and $631.9 billion in the corresponding year-ago same period.
Balance Sheet
At September 30, 2017, Legg Mason's cash position was $654 million. The Company's net debt was $2.2 billion, and stockholders' equity was $4.0 billion. Legg Mason's ratio of total debt to total capital was 36%, in-line with the prior quarter. The Company's Seed investments totaled $279 million.
During Q2 FY18, Legg Mason retired $90 million, or 2.3 million shares, in the open market. The net impact of the share activity reduced the weighted average shares by 1.1 million.
On October 31, 2017, Legg Mason's Board of Directors has declared a quarterly cash dividend on the Company's common stock in the amount of $0.28 per share. The dividend is payable on January 15, 2018, to shareholders of record on December 20, 2017.
Stock Performance
On Friday, November 17, 2017, the stock closed the trading session at $37.82, slightly falling 0.34% from its previous closing price of $37.95. A total volume of 972.33 thousand shares have exchanged hands, which was higher than the 3-month average volume of 848.88 thousand shares. Legg Mason's stock price surged 1.89% in the last three months and 18.37% in the previous twelve months. Furthermore, since the start of the year, shares of the Company have rallied 26.45%. The stock is trading at a PE ratio of 14.76 and has a dividend yield of 2.96%. At Friday's closing price, the stock's net capitalization stands at $3.49 billion.
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