Legg Mason Inc. Third Quarter Earnings Sneak Peek

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S&P 500 (NYSE:SPY) component Legg Mason, Inc. (NYSE:LM) will unveil its latest earnings on Friday, January 27, 2012. Legg Mason is a global asset management company that offers investment management and related services to individual and institutional clients.

Legg Mason, Inc. Earnings Preview Cheat Sheet

Wall St. Earnings Expectations: The average estimate of analysts is for profit of 29 cents per share, a decline of 29.3% from the company’s actual earnings for the same quarter a year ago. During the past three months, the average estimate has moved down from 30 cents. Between one and three months ago, the average estimate moved up. It has dropped from 32 cents during the last month. For the year, analysts are projecting net income of $1.54 per share, a decline of 1.9% from last year.

Past Earnings Performance: Last quarter, the company beat estimates by one cent, coming in at profit of 39 cents per share against an estimate of net income of. The company also topped expectations in the first quarter.

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Wall St. Revenue Expectations: On average, analysts predict $655.7 million in revenue this quarter, a decline of 9.2% from the year ago quarter. Analysts are forecasting total revenue of $2.7 billion for the year, a decline of 2.9% from last year’s revenue of $2.78 billion.

Analyst Ratings: Analysts are bullish on Legg Mason as four analysts rate it as a buy, three rate it as a sell and seven rate it as a hold.

A Look Back: In the second quarter, profit fell 24.8% to $56.7 million (39 cents a share) from $75.3 million (50 cents a share) the year earlier, but exceeded analyst expectations. Revenue fell 0.7% to $669.9 million from $674.8 million.

Key Stats:

A year-over-year revenue decrease in the second quarter snapped a streak of three consecutive quarters of revenue increases. Revenue rose 6.4%in the first quarter, 6.3% in the fourth quarter of the last fiscal year and 4.6% in the third quarter of the last fiscal year.

The decrease in profit in the second quarter broke a streak of three consecutive quarters of year-over-year profit increases. Net income rose 25.1% in the first quarter, 8.5% in the fourth quarter of the last fiscal year and 37.2% in the third quarter of the last fiscal year.

Competitors to Watch: AllianceBernstein Holding LP (NYSE:AB), Westwood Hldgs. Group, Inc. (NYSE:WHG), Diamond Hill Investment Group, Inc. (NASDAQ:DHIL), Epoch Holding Corp (NASDAQ:EPHC), Morgan Stanley (NYSE:MS), Pzena Investment Management, Inc. (NYSE:PZN), Artio Global Investors Inc. (NYSE:ART), Sanders Morris Harris Group (NASDAQ:SMHG), The Blackstone Group L.P. (NYSE:BX), and Affiliated Managers Group, Inc. (NYSE:AMG).

Stock Price Performance: During November 22, 2011 to January 23, 2012, the stock price had risen $4.19 (17.8%) from $23.48 to $27.67. The stock price saw one of its best stretches over the last year between February 10, 2011 and February 18, 2011 when shares rose for seven-straight days, rising 7.8% (+$2.65) over that span. It saw one of its worst periods between April 27, 2011 and May 6, 2011 when shares fell for eight-straight days, falling 8.4% (-$3.13) over that span.

(Company fundamentals by Xignite Financials. Earnings estimates provided by Zacks)

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