Legg Mason reported a healthy 22% increase in its profits in the first fiscal quarter, ended June 30, to $191 million, or $1.32 a share, up from $156 million, or $1.08 a share, in the first fiscal quarter a year ago, Reuters reports. Those earnings were on a 16% rise in revenue, to a record $1.21 billion, and beat Wall Street estimates of $1.24 a share.
But although total assets under management rose 16% to $992 billion, upon hearing the news that the company suffered $7 billion in net outflows from its stock funds, primarily due to disappointing returns, its share price fell 3.5% early yesterday.
“This is one of those good news, bad news quarters,” said Morningstar analyst Jeff Ptak. “The flows on the equities side clearly have people concerned.”
Commenting on public reaction to legendary fund manager Bill Miller losing his 15-year winning streak of beating the S&P 500 last year, Legg Mason Chairman and CEO Raymond “Chip” Wilson once again reiterated that Miller’s record is exemplary, and that it is inevitable that he will have some off years. “When you’ve got some of the best managers in the business, you ride out the storm with them,” Wilson said.
The staff of Money Management Executive ("MME") has prepared these capsule summaries based on reports published by the news sources to which they are attributed. Those news sources are not associated with MME, and have not prepared, sponsored, endorsed, or approved these summaries.