Being too optimistic can lead to disappointment. That is precisely the lesson Wall Street learned, when Legg Mason's fiscal fourth quarterly earnings, while up 28%, failed to meet analysts' expectations, The Wall Street Journal reports.

The company's reported net income of $150.1 million, or $1.03 a share in the three month period ending March 31, up from $117.6 million, or 98 cents a share, in the fourth quarter of 2005. While strong, the net income was below the $1.25 a share that analysts polled by Thomson Financial projected.

Legg Mason's assets under management didn't grow as much as many analysts expected. In addition, the company incurred higher-than-expected expenses.

"This earnings miss will disappoint investors and pull into question the earnings power of the company," said Chris Meyer, an analyst at Morgan Stanley. He added that costs and not revenue were a problem.

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.

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