BOSTON, July 26 (Reuters) - Legg Mason Inc reported on Monday its quarterly earnings decreased more than expected as expenses rose and investors pulled money out of many of its funds.
The Baltimore asset manager reported fiscal first-quarter net income of $47.9 million, or 30 cents per share, compared with net income of $50.1 million, or 35 cents per share, in the same period a year earlier. The quarter ended June 30.
Analysts had expected the company to report a profit of 31 cents per share, according to Thomson Reuters I/B/E/S. Expenses rose 3 percent to $571 million compared with a year ago.
Assets under management fell to $645.4 billion at June 30, from $684.5 billion at March 31, with most of the decrease tied to net outflows of $23.1 billion.
Fixed income outflows were $9.4 billion, and liquidity outflows were $14.4 billion.
The company did have about $700 million flow into stock mutual funds, however -- the first quarter of such flows in over four years.
Sandler O'Neill analyst Michael Kim said he was satisfied with the flow figures because they were weighed so heavily to money-market funds. 'My general takeaway is that flows continue to improve,' he said.
Although Legg Mason trades at a higher multiple of its earnings than peers, lingering outflows from its funds worry investors. Legg Mason's shares were down 4 percent for the year so far as of Friday.
One support for the shares has been a buyback of up to $1 billion begun in the spring by Chief Executive Mark Fetting, along with a restructuring that includes about 350 layoffs.
Severance payments and related costs added $3.2 million to the current quarter's expenses, Legg Mason said. The company also booked $17.6 million of expenses in the quarter tied to the recent launch of a closed-end fund.
(Reporting by Ross Kerber; editing by Andre Grenon and Carol Bishopric) Keywords: LEGGMASON/ (Ross.Kerber@ThomsonReuters.com; +1-617-856-4341; Ross.Kerber.Reuters.com@Reuters.net) COPYRIGHT Copyright Thomson Reuters 2010. 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.
The Baltimore asset manager reported fiscal first-quarter net income of $47.9 million, or 30 cents per share, compared with net income of $50.1 million, or 35 cents per share, in the same period a year earlier. The quarter ended June 30.
Analysts had expected the company to report a profit of 31 cents per share, according to Thomson Reuters I/B/E/S. Expenses rose 3 percent to $571 million compared with a year ago.
Assets under management fell to $645.4 billion at June 30, from $684.5 billion at March 31, with most of the decrease tied to net outflows of $23.1 billion.
Fixed income outflows were $9.4 billion, and liquidity outflows were $14.4 billion.
The company did have about $700 million flow into stock mutual funds, however -- the first quarter of such flows in over four years.
Sandler O'Neill analyst Michael Kim said he was satisfied with the flow figures because they were weighed so heavily to money-market funds. 'My general takeaway is that flows continue to improve,' he said.
Although Legg Mason trades at a higher multiple of its earnings than peers, lingering outflows from its funds worry investors. Legg Mason's shares were down 4 percent for the year so far as of Friday.
One support for the shares has been a buyback of up to $1 billion begun in the spring by Chief Executive Mark Fetting, along with a restructuring that includes about 350 layoffs.
Severance payments and related costs added $3.2 million to the current quarter's expenses, Legg Mason said. The company also booked $17.6 million of expenses in the quarter tied to the recent launch of a closed-end fund.
(Reporting by Ross Kerber; editing by Andre Grenon and Carol Bishopric) Keywords: LEGGMASON/ (Ross.Kerber@ThomsonReuters.com; +1-617-856-4341; Ross.Kerber.Reuters.com@Reuters.net) COPYRIGHT Copyright Thomson Reuters 2010. 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.