Amvescap, parent company of mutual fund companies Invesco and AIM Investments, reported third-quarter profits of $102 million, or 13 cents a share, Wednesday. While that was a 36% increase from $74.9 million, or 9 cents a share, in the third quarter of 2005, it fell short of analysts’ estimates of $113 million.
Although investors pulled $700 million from the company’s funds in the third quarter, strong performance boosted assets under management 6.5% to $440.6 billion.
The company also took a third-quarter charge of $41.1 million because it expects the value of 12.9 million outstanding performance-related stock options awarded in 2003 will reach a level where employees will be able to vest them. In order for that to happen, Amvescap said, earnings per share for the year ended Dec. 31, 2006 will have to be 50% greater than last year's total earnings per share of 34 cents. The company plans to take the remaining charge of $3.7 million related to the options in the fourth quarter.
“The growing strength of Amvescap’s financial performance ethroughout 2006 resulted in this quarter’s expense charge for 2003 performance-based option awards that we now expect to vest at the end of the year,” said Amvescap President and Chief Executive Officer Martin L. Flanagan.
“With improving investment performance, additions to our broad range of investment solutions from PowerShare’s distinctive line of ETFs and the respected financial restructuring expertise of WL Ross & Co., and a disciplined focus on expenses, we are in a good position to continue building business momentum.”