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Legg Mason (LM) Reports Loss in Fiscal Q4; Low Revenue

Have you been eager to see how Legg Mason Inc. LM performed in fourth-quarter fiscal 2016 in comparison with the market expectations? Let’s quickly scan through the key facts from this Maryland-based investment management company’s earnings release this morning:

Reports Loss

Legg Mason came out with adjusted loss per share of 15 cents as compared with adjusted income of $1.03 in the prior-year quarter. Zacks Consensus Estimate was 13 cents. Higher adjusted operating expenses and reduced revenues were the undermining factors.

How Was the Estimate Revision Trend?

You should note that the earnings estimate revisions for Legg Mason depicted neutral stance prior to the earnings release. The Zacks Consensus Estimate has remained stable over the last 7 days.

Also, Legg Mason has a decent earnings surprise history. Before posting loss in fiscal Q4, the company delivered positive surprises in three of the last four quarters. The company outpaced the Zacks Consensus Estimate by an average of 10.29% in the trailing four quarters.

Revenue Came In Lower Than Expected    

Legg Mason posted total revenue of $619.5 million, which missed the Zacks Consensus Estimate of $632 million. Moreover, it compared unfavorably with the year-ago number of $702.3 million.

Key Developments to Note:

  • Adjusted loss came in at $16.7 million.
  • Assets under management stood at $669.6 billion, down 5% year over year.
  • Legg Mason recorded acquisition and transition-related costs of 29 cents per share along with a compensation charge associated with the Royce management equity plan (MEP) grant of 13 cents.

What Zacks Rank Says

The estimate revisions that we discussed earlier have driven a Zacks Rank #3 (Hold) for Legg Mason. However, since the latest earnings performance is yet to be reflected in the estimate revisions, the rank is subject to change. While things apparently look unfavorable, it all depends on what sense the just-released report makes to the analysts.
 
Check back later for our full write up on this Legg Mason earnings report!

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LEGG MASON INC (LM): Free Stock Analysis Report
 
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