Franklin Resources Q4 Profit Rises, But Results Miss Estimates

(RTTNews) - Franklin Resources Inc. (BEN) on Thursday reported a 3 percent increase in profit for the fourth quarter from last year, reflecting higher investment management fees as well as sales and distribution fees. However, both revenue and earnings per share for the quarter missed analysts' estimates. Assets under management increased 13 percent from last year.

San Mateo, California-based Franklin Resources is an asset management holding company that offers investment vehicles for clients, including individuals, institutions, pension plans, trusts and partnerships.

The company's investment management fees for the fourth quarter grew 13 percent from the year-ago period to $1.29 billion, while sales and distribution fees increased 4 percent to $604.7 million. Shareholder servicing fees rose 3 percent to $75.2 million, while other revenues declined 6 percent to $19.2 million.

Net income attributable to the company for the fourth quarter was $509.0 million or $0.80 per share, up from $492.1 million or $0.77 per share in the year-ago period. On average, 19 analysts polled by Thomson Reuters expected earnings per share of $0.87 for the quarter. Analysts' estimates typically exclude one-time items.

Operating revenues for the quarter grew 9 percent to $1.98 billion from $1.82 billion in the year-ago period. Analysts had a consensus revenue estimate of $2.08 billion.

Operating margin for the quarter expanded to 37.0 percent from 34.3 percent in the same period last year.

As at September 30, 2013, the company's total assets under management or AUM were $844.7 billion. AUM increased $94.8 billion or 13 percent year-on-year, chiefly due to $66.1 billion of market appreciation and $24.3 billion of net new flows.

For fiscal 2013, Franklin Resources' net income was $2.15 billion or $3.37 per share, up from $1.93 billion or $2.98 per share last year. Operating revenues for the year increased 12 percent to $7.99 billion from $7.10 billion in the prior year.

Analysts expected the company to report earnings of $3.44 per share for the year on revenues of $7.92 billion.

In Thursday's regular trading session, BEN is trading at $53.24, down $1.05 or 1.93 percent on volume of 1.26 million shares.