Legg Mason Inc. Chairman Raymond A. Mason is hoping the worst is in the past for the Baltimore-based securities firm.
Last year, the company's earnings were hammered as the stock market struggled under a high interest rate environment. But Mr. Mason was upbeat yesterday about the future as he addressed shareholders at the company's annual meeting at the Stouffer Harborplace Hotel.
"I'd like to believe we are back on course," he said. "We had a strong first quarter. I would like to believe the year is going to continue this way."
Indeed, Legg Mason rebounded smartly in its first fiscal quarter that ended June 30, earning $111.3 million, up 24 percent from the same time a year ago. The company also said yesterday it increased its annual dividend to 48 cents a share from 44 cents.
Mr. Mason declined to predict how well the company will do in the second quarter, and he noted that "broad swings in the market will affect us."
Perrin H. Long, an analyst with Brown Brothers Harriman & Co., a New York-based private banking firm, said Legg Mason has "long-term attraction" as a stock.
Last year "was a terrible year, but going forward I think earnings could be somewhere around $1.95 a share," he said. The company earned $1.30 a share last year.
Mr. Mason was encouraged by the performance of Western Asset Management Co., which manages fixed income portfolios for institutional clients. Since the beginning of the year, Western has brought in new clients that include Northwest Airlines and the West Virginia State Board of Investment. The company will also begin managing $330 million in funds for the School Employees Retirement System of Ohio.
When Mr. Mason opened the floor to questions, a person in the audience asked him to justify the size of the company's board. Legg Mason has 18 directors including Margaret DeB. Tutwiler, a spokeswoman under the Bush Administration, who was named to the board yesterday.
Mr. Mason said he had no plans of reducing the number of directors as a way to save money. Outside directors receive an annual retainer of $10,000 as well as a $2,000 fee for each board meeting they attend, according to the company's proxy statement.
"We really need to get more fresh air into our thought process," Mr. Mason said. Shares yesterday closed at $28.62, up 75 cents.