Legg Mason Inc., a Baltimore-based investment firm, continued to benefit from investors' frustration with low interest rates, reporting a nearly 50 percent increase in profits in the quarter ended Sept. 30.
The company earned $6.8 million, or 74 cents a share, in its fiscal second quarter, up from earnings of $4.6 million, or 51 cents a share, in the three-month period a year ago. Per-share earnings on a fully diluted basis were 68 cents in the latest quarter and 47 cents a year ago.
Legg Mason's six-month earnings rose to $14.4 million, or $1.57 a share, a 65.7 percent increase from the year-earlier period.
Legg Mason, like many investment firms, gained on a year-to-year basis as depositors continued to give up on the low interest rates they were earning in money market and certificate of deposit accounts and turned to the stock market, either
directly or through mutual funds, such as the 10 funds that Legg manages.
But it was in the fee-based areas that the company really shined. Many municipalities responded to falling rates by turning to companies such as Legg to help them either refinance old bonds or sell new ones.
"The results of corporate finance, public finance and our investment adviser activities were particularly strong in both the three- and six-month periods," Raymond A. "Chip" Mason, chairman and chief executive officer, said in a statement.
Mr. Mason has spoken often of his desire to increase Legg Mason's activities in sectors that don't depend on the peaks and valleys of stock market investing.
Indeed, the most improved player in the company's second-quarterperformance was the investment banking division, whose contribution rose to 17.7 percent of revenues from 12.7 percent a year ago. Total revenues in the investment banking unit rose more than 57 percent from a year ago.
Legg Mason's stock closed at $21.875 yesterday, up 25 cents a share, in trading on the New York Stock Exchange.
Three months ended 9/30/92
. .................Revenue. .............. Net................... Share
'92.............. 77,728,000............ 6,844,000............. 0.74
'91.. ..... ..... 68,666,000.. . ........4,592,000.. .......... 0.51
% change... ........... +13.2.. . ............ +49.0............. +45.1
Six months ended 9/30/92
.. ...............Revenue. .............. Net................. Share
'91............. 158,947,000........... 14,448,000.. ....... 1.57
'90............. 136,604,000........... 8,722,000. . . .....0.97
% change. ............. +16.4................. +65.7.......... +61.9