Legg Mason, citing $206 million in charges tied to supporting money market funds with subprime and other illiquid fixed-income exposure, posted a net loss of $256 million in the first quarter, down from profits of $173 million in the year-ago period.
The firm also pointed to problems in its wealth management division that caused its net profits to decline $95 million.
Revenue came in at $1.07 billion on a consensus of $1.12 billion or a loss of 27 cents a share. Assets under management declined 5% to $950 billion on $28 billion in market losses and $19 billion in net outflows.
Legg Masons fundamentals are strong, and business continues to be brisk outside of the U.S., said CEO Mark Fetting, but we know we have work to do. This past quarter was among the most difficult we have ever faced, and we are disappointed with the results.