Janus Capital Group Inc.
) reported first-quarter 2014 earnings per share attributable to
common shareholders of 16 cents, in line with the Zacks Consensus
Estimate. However, results compared favorably with the prior-year
quarter earnings of 15 cents.
Top-line growth and increased asset under management (AUM) depict
the stability in earnings. However, net outflows and a rise in
operating expenses were headwinds for the quarter.
Net income stood at $30.5 million compared with $28.0 million in
the prior-year quarter.
Performance in Detail
Total revenue increased 7.5% year over year to $230.2 million,
primarily due to higher investment management fee revenues,
partially offset by negative performance fees. Moreover, revenues
were above the Zacks Consensus Estimate of $226.0 million.
Total operating expenses increased 2.4% on a year-over-year basis
to $163.3 million in the first quarter. The increase came on the
back of higher employee compensation and benefits and
distribution expenses. These were partly offset by lower
depreciation and amortization along with reduced long-term
As of Mar 31, 2014, Janus Capital reported AUM of $174.1 billion,
up from $163.8 billion as of Mar 31, 2013 and $173.9 billion as
of Dec 31, 2013. Moreover, average AUM increased to $173.0
billion from $161.8 billion in the prior-year quarter and $170.3
billion in the previous quarter.
The increase in company-wide assets during first-quarter 2014
primarily reflects net market appreciation of $1.9 billion,
partially offset by long-term net outflows of $1.7 billion.
Fundamental and mathematical equity long-term net outflows summed
to $2.3 billion and $0.2 billion, while fixed income long-term
net inflows totaled $0.8 billion during the quarter.
As of Mar 31, 2014, Janus Capital had stockholders' equity of
$1.5 billion, cash and investments of $768.6 million and
outstanding debt of $546.2 million compared with stockholders'
equity of $1.5 billion, cash and investments of $830.0 million
and outstanding debt of $544.6 million in the prior quarter.
Cash flow from operations during the reported quarter was a
negative $36 million compared with $92.1 million in the prior
Capital Deployment Activity
During first-quarter 2014, Janus Capital repurchased 955,032
shares of its common stock at an average price of $11.00 per
share and a total cost of $10.5 million.
Recently, Janus Capital's board of directors approved a 14% hike
in the quarterly common stock dividend to 8 cents per share from
7 cents. The new dividend will be paid on May 23, 2014, to
stockholders of record as of May 9.
Janus Capital has the best-in-class investment boutique with
potential for AUM and revenue along with competitive leverage
growth. Capital deployment activities of the company are also
commendable. However, weakness in flows remains a matter of
Though the fixed income segment and global operations are showing
signs of improvement, the company's equity-heavy portfolio makes
it vulnerable to the equity market. Nevertheless, given its
healthy balance sheet, we believe Janus Capital has the potential
to perform well in the long run aided by a significant rebound in
Shares of Janus Capital currently carry a Zacks Rank #3 (Hold).
Among other investment managers,
Ameriprise Financial, Inc.
) is scheduled to report March quarter-end results on Apr 28,
Legg Mason Inc.
) will report on May 1.
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INVESCO LTD (IVZ): Free Stock Analysis Report
JANUS CAP GRP (JNS): Free Stock Analysis
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