Legg Mason Q1 Profit Falls, Missing Estimates (LM)

By Dividend.com,  July 27, 2010, 08:37:52 AM EDT

Asset manager Legg Mason, Inc. ( LM ) on Tuesday posted lower-than-expected first quarter earnings, sending its shares plunging in premarket trading.

The Baltimore-based company reported fiscal first quarter net income of $47.9 million, or 30 cents per share, down from $50.1 million, or 35 cents per share, in the year-ago period.

On average, Wall Street analysts expected a slightly higher profit of 31 cents per share.

LM said that assets under management fell to $645.4 billion from $684.5 billion last year, citing net outflows of around $23.1 billion. Fixed income outflows amounted to $9.4 billion, while outflows from money-market funds and other similar funds were $14.4 billion.

Stock mutual funds saw inflows of about $700 million, though, marking the first increase in that unit in more than four years.

Legg Mason shares fell $1.23, or -4.1%, in premarket trading Tuesday.

The Bottom Line
We had removed LM from our "recommended" list last Sept.15, when the shares traded at $36.30. The company has a .53% dividend yield, based on last night's closing stock price of $30.08. The stock has technical support in the $27 price area. If the shares can firm up, we see overhead resistance around the $34 price level. We would remain on the sidelines for now.

Legg Mason, Inc. ( LM ) is not recommended at this time, holding a Dividend.com DARS™ Rating of 3.1 out of 5 stars.

Be sure to visit our complete recommended list of the Best Dividend Stocks , as well as a detailed explanation of our ratings system here .




The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.


This article appears in: Investing, Stocks

Referenced Stocks: LM



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