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BALTIMORE (AP) — Legg Mason, the money management firm in the middle of a rocky CEO transition, on Friday reported results that beat Wall Street estimates even as revenue slipped.
For the fiscal second quarter, which covered July through September, Legg Mason earned $80.8 million, or 60 cents per share, up 42 percent from $56.7 million, or 39 cents per share, a year ago.
After stripping out one-time items, per-share earnings would have been 75 cents.
Revenue slipped about 4 percent, to $640.3 million from $669.9 million, though that was ahead of the $636 million that analysts polled by FactSet had expected. The per-share earnings also beat analysts' expectations; they had predicted 48 cents excluding one-time items.
Money management companies like Legg Mason make money both by charging fees for managing clients' money and by taking a cut when the investments do well.
Distribution and service fees fell 4.5 percent over the year. But performance fees were up about 3 percent. The company made money on its corporate investments, as opposed to losing money a year ago.
The financial crisis and its aftermath have been hard on Legg Mason, as nervous clients have pulled money out of the markets. Assets under management rose both over the quarter and over the year. But the increase over the quarter was based mostly on the assets it already managed gaining value, rather than clients adding to their holdings. Clients continued to withdraw stocks and bonds over the quarter.
Joe Sullivan, who is working as interim CEO, said in a statement that results were "buoyed by improved markets." But he also said investors were still seeking "a safe haven" for their investments, an indication that they're still wary of risk taking.
Of the assets that the company manages, 57 percent were in bonds, which are considered less risky than stocks. Twenty-three percent of its holdings are in stocks.
Sullivan has been interim CEO since Oct. 1, when Mark Fetting stepped down with no permanent replacement. Sullivan was previously head of global distribution. Both Fetting and the company said Fetting had been at the helm during a "challenging" period, as the global financial crisis upended the markets and the world economy.
Legg Mason's stock rose 28 cents, or 1.1 percent, to $24.98 in morning trading.