Money management firm Legg Mason's earnings for the three-month period ending in December slipped 6.1 percent from a year earlier as revenue flattened.
The Baltimore-based firm earned $77 million in what is its third quarter, or 67 cents per share, compared to $81.7 million the year before. Revenues were down about $1 million to $719 million as a drop in performance fees offset gains in other advisory and distribution fees.
Assets managed by Legg were up about 4.4 percent from the year before to $709.1 billion and up slightly from $707.8 billion at the end of the prior quarter. Long-term inflows of $8.8 billion were offset by a loss of $10.6 billion as investors pulled cash out of funds. The assets gained $3.1 billion in market value overall.
Legg has struggled in recent years with losses of assets under management, but Joseph A. Sullivan, chairman and CEO, said the company is moving in the right direction.
"We have made substantial progress with regard to chronic net flow challenges, and we're very pleased to have positive net flows for three consecutive quarters," Sullivan said in a conference call with reporters Friday. "As we enter this calendar year we intend to build on our progress and capitalize on the investment performance by our affiliates, which remain strong under a broad set of strategies and products."
Sullivan said recent volatility in global markets has shaken up investors, "but it is precisely this volatility that our investment managers believe offer significant investment opportunity for long-term investors to achieve substantial returns."
Macrae Sykes, an analyst with Gabelli & Company, said he thought "it was a pretty good quarter" for Legg.
"They feel like they can accelerate the initiatives that they've put in place and now its all about executing," he said. "They're seeing the light in the tunnel a bit in terms of gross sales and net flows picking up."
Of the flows, Sykes added: "There certainly is momentum. There's definitely some positive steps, but it's a dynamic market and they just have to continue to stay focused."
During the quarter, Legg acquired international equity firm Martin Currie, based in Edinburgh, Scotland, in October and sold a subsidiary, Legg Mason Investment Counsel & Trust Co., to investment banking firm Stifel Financial. Costs from the sale and acquisition were $5.7 million, Legg reported.
The company also announced a $1 billion buyback program for its shares, which rose 2.5 percent in Friday trading to $55.44 each.