Despite admitting it would take a $60 million pretax charge to pay for improper trade-related costs, Franklin Resources, manager of Templetons mutual funds, announced a 58% profit for the quarter.
With net income for the fiscal second quarter of $172.8 million, or 68 cents per share, the company actually earned three cents less than the average prediction by 11 Reuters analysts of 71 cents a share. But still, one year after profiting just $109.6 million, or 43 cents per share for the quarter, the results were welcome.
A $45.6 million after tax charge was partially softened by an $18.3 million insurance recovery stemming from the Sept. 11 attacks upon the World Trade Center, the company said.
Chicago-based fund tracker Morningstar has marked Franklin with a "proceed with caution" tag due to its involvement in the mutual fund scandal, while CalPERs, the nations largest public pension fund, is considering dropping Franklin all together. Still, the companys assets under management rose to $351.6 billion, a jump from $253.4 billion at the same time last year.