Legg Mason Swings to Q4 Profit, Will Cut Jobs and Buy Back Shares (LM)

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Asset manager Legg Mason, Inc. ( LM ) said late Monday that it swung to a fiscal fourth quarter profit, and announced plans to cut 10% of its workforce while buying back $1 billion of its own shares.

The Baltimore-based company reported fiscal fourth quarter net income of $63.6 million, or 39 cents per share, compared with a net loss of $330 million, or $2.33 per share, in the year-ago period.

On average, Wall Street analysts expected a smaller profit of 35 cents per share.

Legg Mason said that AUM, or assets under management, rose 8% from last year, to $684.5 billion.

Additionally, the company said it would cut 350 jobs, or about 10% of its workforce, in order to slash costs by $130 million to $150 million per year by the fourth quarter of fiscal 2012.

The company also announced a $1 billion share buyback plan.

Legg Mason shares rose 45 cents, or +1.5%, 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 $29.95. The stock has technical support in the $25-$26 price area. If the shares can firm up, we see overhead resistance around the $32-$33 price levels. 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.

Created by Dividend.com

This article appears in: Investing , Stocks

Referenced Stocks: LM



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