(By Balaseshan) Money manager Legg Mason Inc. (NYSE:LM) slipped to a quarterly loss due to a non-operating charge from the debt extinguishment and a negative impact from fund investment. Results missed Street's expectations.
Loss for the first quarter was $9.46 million or $0.07 per share, compared to a profit of $59.95 million or $0.40 per share last year. Adjusted profit plunged 18.7% to $88.63 million, while adjusted earnings per share (EPS) fell 12.3% to $0.64.
Operating revenue fell 12% to $630.7 million, reflecting a 5% decrease in average Assets Under Management (AUM), and a less favorable asset mix, as well as lower performance fees. Adjusted revenue dropped 14.1% to $461.47 million.
Analysts, on average, polled by Thomson Reuters had expected break even per share on revenue of $645.22 million for the first quarter.
For the fourth quarter of 2011, Legg Mason earned $0.54 per share on GAAP basis and $0.88 per share on non-GAAP basis on operating revenue of $648.6 million.
AUM declined 2% to $631.8 billion from $643.3 billion as of March 31, 2012, primarily driven by dispositions, market depreciation and client outflows. AUM was down 5% from $662.5 billion as of June 30, 2011.
Average AUM during the quarter was $635.5 billion compared to $634.9 billion previous quarter and $670.8 billion last year.
At June 30, 2012, Legg Mason's cash position was $0.8 billion. Total debt was $1.2 billion and stockholders' equity was $5.5 billion.
In addition, the company's board of directors has declared a quarterly cash dividend of $0.11 per common share, payable on October 22 to shareholders of record at the close of business on October 4.
LM closed Thursday's regular session up 1.45% at $25.13. The stock has been trading between $22.36 and $31.94 for the past 52 weeks.