Legg Mason Earnings: Increase in Profit Year-Over-Year

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S&P 500 (NYSE:SPY) component Legg Mason Inc. (NYSE:LM) reported net income above Wall Street’s expectations for the second quarter. Legg Mason is a global asset management company that offers investment management and related services to individual and institutional clients.

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Legg Mason Inc. Earnings Cheat Sheet

Results: Net income for Legg Mason Inc. rose to $80.8 million (60 cents per share) vs. $56.7 million (39 cents per share) in the same quarter a year earlier. This marks a rise of 42.6% from the year-earlier quarter.

Revenue: Fell 4.4% to $640.3 million from the year-earlier quarter.

Actual vs. Wall St. Expectations: Legg Mason Inc. beat the mean analyst estimate of 56 cents per share. Analysts were expecting revenue of $645.5 million.

Quoting Management: Joseph A. Sullivan, Interim CEO of Legg Mason, said, “Legg Mason reported higher revenues and solid earnings, buoyed by improved markets. Investment performance versus benchmarks remained strong across all key measurement periods. Overall, Legg Mason reported modest net inflows for the quarter, driven by liquidity assets as many investors continued to seek a safe haven. In the quarter, we repurchased 3.6 million shares of stock under our recently authorized share repurchase program and we will continue to look for ways to return capital to shareholders as appropriate.”

Key Stats:

Revenue has fallen in the past four quarters. Revenue declined 12.1% to $630.7 million in the first quarter. The figure fell 9.1% in the fourth quarter of the last fiscal year from the year earlier and dropped 13.2% in the third quarter of the last fiscal year from the year-ago quarter.

The company topped expectations last quarter after falling short of forecasts in the first quarter with a loss of 7 cents versus a mean estimate of net income of 2 cents per share.

After sitting in the red the quarter before, the company reported a profit last quarter. The company booked a net loss of $76.1 million, or 54 cents per share, in the fourth quarter of the last fiscal year.

Looking Forward: Over the past ninety days, the average estimate for the third quarter has fallen from 52 cents per share to 49 cents, indicating that analysts are growing pessisimistic about the company’s performance next quarter. The average estimate for the fiscal year has seen a bump from $1.37 per share sixty days ago to $1.46.

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

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