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 Nasdaq, Inc.

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