Legg reports $33.5M quarterly profit
Baltimore firm bounces back after losses in two consecutive quarters
“Legg Mason delivered a solid quarter despite a challenging period of geopolitical uncertainty, persistently low interest rates ... and equity market volatility.”
Legg Mason reported Wednesday a profit of $33.5 million in the first quarter of its fiscal year 2017, bouncing back after two consecutive quarters of losses.
The Baltimore money manager’s firstquarter earnings are down, however, from the $94.5 million it earned in the same April-to-June quarter last year. Legg’s per share earnings fell to 31 cents from 84 cents a year earlier.
The results topped analyst estimates of 25 cents per share. Legg shares rose 6.5 percent in after-hours trading, rising to $35.25 after closing Wednesday at $33.11 a share.
“Legg Mason delivered a solid quarter despite a challenging period of geopolitical uncertainty, persistently low interest rates, fee compression and equity market volatility that has continued to pressure active managers,” CEO Joseph A. Sullivan said.
During a call with investors Wednesday, Sullivan described a financial industry “in the early stages of disruption” and said the Legg CEO Joseph A. Sullivan described a financial industry “in the early stages of disruption” and said the company’s diversification strategy is essential to keeping pace with change. company’s diversification strategy is essential to keeping pace with change.
Legg has been working to create more options for clients, both in terms of products and how they access products. Mergers and acquisitions, such as Legg’s deal to buy an 82 percent stake in Financial Guard, an online investment advisory platform, have
CEO Joseph A. Sullivan
helped the company diversify its offerings.
Sullivan’s comments echoed his remarks during the firm’s annual shareholder meeting Tuesday, when he stressed the importance of broadening investments to global scale.
“Yes, it will take time,” Sullivan said during the call with investors. “But we see the disruption before us, combined with the evolution of Legg Mason, as an opportunity to take and grow market share.”
Legg’s assets under management rose to $741.9 billion at the end of June, up $72.3 billion from the end of March, a gain driven largely by the acquisitions of Clarion Partners and EnTrust Capital.
Operating revenue of $700.2 million for the first quarter is down 1 percent from the year-ago quarter.
The results included $56.8 million in acquisition and transition-related costs and an $18 million credit for what it called a “contingent consideration fair value adjustment.”