Legg Mason Inc. Earnings Cheat Sheet: Streak of Four Straight Profit Rises Snapped

S&P 500 (NYSE:SPY) component Legg Mason Inc. (NYSE:LM) posted lower net income in the second quarter compared with a year-earlier period. Legg Mason is a global asset management company that offers investment management and related services to individual and institutional clients.

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Legg Mason Earnings Cheat Sheet for the Second Quarter

Results: Net income for Legg Mason Inc. fell to $56.7 million (39 cents per share) vs. $75.3 million (50 cents per share) a year earlier. This is a decline of 24.8% from the year earlier quarter.

Revenue: Fell 0.7% to $669.9 million from the year earlier quarter.

Actual vs. Wall St. Expectations: LM beat the mean estimate of 38 cents per share. Analysts were expecting revenue of $674.5 million.

Quoting Management: Mark R. Fetting, Chairman and CEO of Legg Mason said, “The quarter was marked by extreme market volatility and continued economic uncertainty that led to many investors moving to, or staying on, the sidelines. That said, Legg Mason’s asset mix helped to mitigate a more significant decline in AUM that affected the industry as a whole.”

Key Stats:

Last quarter’s profit decrease breaks a streak of four consecutive quarters of year-over-year profit increases. In the first quarter, net income rose 25.1% from the year earlier, while the figure increased 8.5% in the fourth quarter of the last fiscal year, 37.2% in the third quarter of the last fiscal year and 64.6% in the second quarter of the last fiscal year.

A year-over-year revenue decrease last quarter snaps a streak of four consecutive quarters of revenue increases. The best quarter in that span was the first quarter, which saw revenue rise 6.4%.

The company has now beaten estimates the last two quarters. In the first quarter, it topped expectations with net income of 40 cents versus a mean estimate of net income of 39 cents per share.

Looking Forward: The outlook for the company’s results in the upcoming quarter is unfavorable. The average estimate for the third quarter is 30 cents per share, down from 45 cents ninety days ago. For the fiscal year, the average estimate has moved down from $1.90 a share to $1.60 over the last ninety days.

Competitors to Watch: AllianceBernstein Holding LP (NYSE:AB), Westwood Hldgs. Group, Inc. (NYSE:WHG), Diamond Hill Investment Group, Inc. (NASDAQ:DHIL), Epoch Holding Corp (NASDAQ:EPHC), Morgan Stanley (NYSE:MS), Goldman Sachs (NYSE:GS), Bank of America (NYSE:BAC), JP Morgan (NYSE:JPM), Citigroup (NYSE:C), Pzena Investment Management, Inc. (NYSE:PZN), Artio Global Investors Inc. (NYSE:ART), Sanders Morris Harris Group (NASDAQ:SMHG), The Blackstone Group L.P. (NYSE:BX), and Affiliated Managers Group, Inc. (NYSE:AMG).

Investing Insights: Here’s Why Chipotle’s Stock Keeps Winning.

(Source: Xignite Financials)