Franklin Resources Inc.'s (BEN) fiscal first-quarter net income
plunged 77% as assets under management and revenue dropped sharply
amid the stock market's plunge.
Generally, tough times were seen for money-management firms in
the quarter, as the financial crisis picked up steam amid falling
asset values, investor redemptions from mutual funds and declining
profit margins. But Keefe Bruyette & Woods analyst Robert Lee
said two weeks ago that Franklin has a lot going for it, including
its diversified product line, competitive performance of its funds
and global distribution.
For the quarter ended Dec. 31, the mutual-fund manager reported
net income of $120.9 million, or 52 cents a share, down from $518.3
million, or $2.12 a share, a year earlier.
Revenue slumped 42% to $969.3 million as investment-management
and underwriting fees slumped.
Analysts polled by Thomson Reuters were looking for earnings of
85 cents a share on revenue of $1.05 billion.
In recent trading, shares of Franklin were up 1.5% at $53.91.
The stock has lost half its value the past four months.
Assets under management were $416.2 billion as of Dec. 31, down
35% from a year earlier and 18% from the prior quarter. Equity
assets comprised 47% of the total, down from 59% and 52%,
respectively.
Last week, Franklin announced it would cut 4% of its global work
force, or about 350 of its 8,600 employees. The cuts came on top of
a 2% headcount reduction announced in October.
-By Mike Barris, Dow Jones Newswires; 201-938-5658;
mike.barris@dowjones.com
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