Legg Mason First Quarter Earnings Sneak Peek

S&P 500 (NYSE:SPY) component Legg Mason, Inc. (NYSE:LM) will unveil its latest earnings on Friday, July 27, 2012. Legg Mason is a global asset management company that offers investment management and related services to individual and institutional clients.

Legg Mason, Inc. Earnings Preview Cheat Sheet

Wall St. Earnings Expectations: The average estimate of analysts is for net income of 2 cents per share, a decline of 95% from the company’s actual earnings for the same quarter a year ago. During the past three months, the average estimate has moved down from 47 cents. Between one and three months ago, the average estimate moved down. It also has dropped from 15 cents during the last month. For the year, analysts are projecting profit of $1.66 per share, a rise of 7.8% from last year.

Past Earnings Performance: The company topped estimates last quarter after missing forecasts the quarter prior. In the fourth quarter of the last fiscal year, it reported net income of 54 cents per share against a mean estimate of profit of 48 cents per share. In the third quarter of the last fiscal year, it missed forecasts by 7 cents.

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A Look Back: In the fourth quarter of the last fiscal year, profit rose 10.2% to $76.1 million (54 cents a share) from $69 million (43 cents a share) the year earlier, exceeding analyst expectations. Revenue fell 9.1% to $648.6 million from $713.4 million.

Wall St. Revenue Expectations: On average, analysts predict $645.5 million in revenue this quarter, a decline of 10% from the year-ago quarter. Analysts are forecasting total revenue of $2.61 billion for the year, a decline of 1.9% from last year’s revenue of $2.66 billion.

Stock Price Performance: Between July 17, 2012 and July 23, 2012, the stock price dropped $1.19 (-4.5%), from $26.47 to $25.28. The stock price saw one of its best stretches over the last year between June 25, 2012 and July 3, 2012, when shares rose for seven straight days, increasing 10.1% (+$2.47) over that span. It saw one of its worst periods between December 9, 2011 and December 19, 2011 when shares fell for seven straight days, dropping 12.1% (-$3.17) over that span.

Key Stats:

On the top line, the company is hoping to use this earnings announcement to snap a string of three-straight quarters of revenue declines. Revenue fell 0.7% in the second quarter of the last fiscal year and 13.2% in third quarter of the last fiscal year before falling again in the fourth quarter of the last fiscal year of the last fiscal year.

Last quarter’s earnings rise was a switch from preceding drops, so the upcoming earnings announcement is a chance to build on last quarter’s result. After net income declines in the second quarter of the last fiscal year and third quarter of the last fiscal year, profit rose in the fourth quarter of the last fiscal year.

Analyst Ratings: There are mostly holds on the stock with seven of 13 analysts surveyed giving that rating.

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

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