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Rating:Q2 Loves You (Unless You're Janus) Not Rated 0.0 Email Routing List Email & Route  Print Print
Friday, July 28, 2006

Q2 Loves You (Unless You're Janus)

by: Neil Anderson, Managing Editor

As the earnings reports kept rolling in, several big fund firms posted tidy profits Thursday, but Janus still missed expectations.

Federated Investors Inc. announced earnings of $0.47 per share in the second quarter, beating Thomson/First Call's expectations by two cents and last June's earnings by 12 cents. Assets under management at the Pittsburgh-based investment manager hit $210.5 billion, up from $204.7 billion at the of June 2005.

Federated president and CEO J. Christopher Donahue credited $6.7 billion of the increase to the company's "acquisition of MDT Advisers" and the "strength" of the company's "equity products."

Also in the second quarter, Federated repurchased nearly 2.5 million shares of common stock for roughly $77.9 million.

San Mateo, California-based asset manager Franklin Resources Inc. reported earnings of $1.41 per share, up from $1.00 and beating expectations of only $1.26. AUM increased to $490.1 billion, from $425.4 billion last June.

T. Rowe Price Group Inc. in Boston announced earnings of $0.49 per share, up 11 cents from last June and beating expectations by a solid three cents. AUM rose $0.8 billion since March, to $293.7 billion, buoyed by net cash inflows of $7.7 billion that outweighed market depreciation of $6.9 billion. The increase in AUM also included $615 million from T. Rowe's acquisition of Preferred Group of Mutual Funds and another $115 million from its acquisition of separate account assets.

George A. Roche, chairman and president of T. Rowe Price, pointed to "exemplary" investment advisory results and "strong" separate managed and sub-advised account performance as driving the company's "healthy pace of net cash inflows." Roche also noted a share repurchase of four million shares ($152 million) in the second quarter. He also warned that returns may be rocky in the times ahead.

“Equity investing in the near-term," Roche stated, "may be less rewarding than investors had become accustomed to in recent years."

British asset manager AMVESCAP reported earnings per share of $0.28, beating expectations by four cents and last June by ten. The London-based firm's AUM rose to $414.6 billion, up from $373.1 billion last June. Net inflows for the quarter reached $2.3 billion, including $2.2 billion in money market asset net inflows. However, AMVESCAP's announced acquisitions of ETF provider PowerShares Capital Management and M&A specialist WL Ross & Co have not yet taken place, and thus did not affect second quarter results

Denver-based Janus Capital Group Inc. reported earnings $0.15 per share, up three cents from last June, but dropping two cents from March 2006 and missing expectations by a penny. AUM hit $153.4 billion, rising from last June's $130.3 billion, but dropping down from $158.1 billion in March.

Janus cited net outflows of $0.4 billion and $5.5 billion in market depreciation as reasons for the AUM drop. However, money market net inflows were a strong $1.2 billion, and Janus's INTECH subsidiary saw net inflows of $2.6 billion.

New York-based Cohen & Steers Inc. lost $0.95 per share, after gaining $0.21 last June, and after analysts estimated a gain $0.26. However, the loss includes a $1.25 per share prepayment made to holders of some of their closed-end mutual funds. Co-chairman and co-CEO Robert Steers explained in a release.

"We were able to utilize capital raised in our IPO to create tremendous value for shareholders," Steers stated, "by prepaying most of our compensation arrangements we had entered into in connection with certain of our closed-end mutual funds."

AUM rose $23.2 billion, up from $19.9 billion last June. Steers credit "strong net inflows into our global and international portfolios". Net inflows totaled $536 million for the quarter.  

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