Legg Mason Q2 Profit Rises; Assets Under Management Up 1%

(RTTNews) - Asset manager Legg Mason Inc. (LM) on Friday reported a 7 percent increase in profit for the third quarter from last year on higher revenues and control on expenses. The company's assets under management or AUM rose 1 percent from the year-ago period, as an increase in market performance and foreign exchange more than offset outflows of $1.4 billion.

The company's net income for the second quarter rose to $86.29 million or $0.70 per share from $80.80 million or $0.60 per share in the year-ago period. The latest quarter's results included a United Kingdom tax benefit of $19.2 million or $0.16 per share, compared with a similar U.K. tax benefit of $18.1 million or $0.13 per share, in the prior-year quarter.

On an adjusted basis, income for the quarter was $104.49 million or $0.85 per share, compared to $100.10 million or $0.75 per share in the year-ago period. On average, sixteen analysts polled by Thomson Reuters expected earnings per share of $0.61 for the quarter. Analysts' estimates typically exclude one-time items.

Operating revenues for the quarter rose 5 percent to $669.85 million from $640.30 million in the year-ago period, primarily reflecting higher average equity AUM and higher performance fees. Analysts had a consensus revenue estimate of $659.77 million for the quarter.

Operating expenses for the quarter rose 1 percent from the same period last year to $563.49 million.

At quarter-end, Legg Mason's assets under management or AUM were $656.0 billion, up 1 percent from $650.7 billion as of September 30, 2012. AUM also increased from $644.5 billion at June 30, 2013, primarily driven by a $14.2 billion increase in market performance and foreign exchange, which more than offset outflows of $1.4 billion and dispositions of $1.3 billion.

Equity outflows in the latest quarter were $4.0 billion, while fixed income inflows were $300 million and liquidity inflows were $2.3 billion.

The company's board of directors declared a quarterly cash dividend on its common stock of $0.13 per share. The dividend is payable January 6, 2014 to shareholders of record at the close of business on December 11, 2013.

In Friday's regular session, LM is trading at $37.67, up $0.80 or 2.17 percent on a volume of 285,703 shares.