Legg Mason Sees Quarterly Earnings Rise 14%

Oct. 26--Legg Mason Inc. earned a profit of $75.7 million for the second quarter, up 14 percent from the same period a year earlier, the Baltimore-based money management firm said Wednesday.

Earnings rose to 78 cents per share from 63 cents per share in the second quarter of 2016, beating analysts' expectations. Wall Street had expected earnings of 69 cents per share, according to Zacks Consensus Estimate.

Operating revenue climbed to $768.3 million in the three months ending Sept. 30, compared with revenue of $748.4 million in the second quarter of 2016, the company said. Analysts anticipated revenue of $739.1 million, according to Zacks.

Joseph A. Sullivan, Legg Mason's chairman and CEO, attributed what he called the strong performance to solid core revenue and "prudent" management of expenses.

"The diversification of our business mix contributed to these results and the resiliency of our operating revenue yield," Sullivan said. "We are realizing greater client asset persistency in the retail channels as we continue to provide greater choice in investment strategies and vehicles."

The profit increase was driven by higher average long-term assets under management, higher performance fees and lower acquisition and transition-related costs, the company said.

Sullivan said net sales across the global distribution platform also showed how the business has diversified by geography, channel and investment affiliate.

"We will continue to execute our strategy of expanding client choice to meet the rapidly evolving needs of our global client base," Sullivan said.

The company reported assets under management of $754.4 billion as of the end of the quarter, up from assets of $741.2 billion as of June 30, reflecting $12.5 billion in positive market performance, $2.2 billion in positive foreign exchange and liquidity inflows of $0.2 billion.

At the end of the quarter, fixed income made up more than half of assets under management, while equity made up more than a quarter. U.S. clients accounted for 68 percent of assets under management, with non-U.S. domiciled clients making up the rest, Legg Mason said.

Before the earnings were announced, Legg Mason shares closed Wednesday up 7 cents at $37.70 each.

lorraine.mirabella@baltsun.com

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