Baltimore money manager Legg Mason Inc. posted a quarterly profit Thursday, but investors continued to withdraw their investments from its stock and bond funds even as the market rebounded and bolstered others in the industry.

Investors took out about $33 billion from Legg funds in the fiscal third quarter that ended Dec. 31. Fixed income took the biggest hit, with about $24 billion in outflow. Assets under management decreased 2 percent to $686 billion, compared with $698 billion a year ago.

News of the outflows coupled with earnings that didn't meet analyst expectations caused the stock price to fall Thursday. Legg shares fell $3.11, or 9.9 percent, to close at $28.32 on the New York Stock Exchange.

Analysts peppered executives with questions about the outflow during a conference call Thursday morning.

Mark Fetting, Legg chairman and chief executive, said some of the withdrawals from Western Asset Management, the bulk of its fixed-income operations, were because of year-end changes to investment portfolios. He also said some clients moved their money to other Legg funds that had shown strong improvement.

"We do see the outflows continuing to be an issue," Fetting told analysts. "Important to Western returning to net inflows will be continued strong performance and the continued decreased volatility in the fixed-income markets."

One analyst said Legg Mason might still be feeling the effects from when its funds were underperforming. There might have been a lag time between when investors decided to withdraw their money and then did it.

"They may be faced by problems from 2007 and 2008," said Jeffrey Hopson, an analyst with Stifel Nicolaus.

Hopson said he believes the "worst is over" but doubts the funds will see inflows immediately, particularly because the third quarter didn't meet analyst expectations. "Clearly the quarter was disappointing," he said. "But I have reason to believe they will make progress in this turnaround."

The company said net income was $44.9 million, or 28 cents per share for the quarter. That compares with to a loss of $1.49 billion, or $10.59 per share, for the same period a year ago. The second quarter included $22 million, or 9 cents per share, in transaction costs.

Analysts expected earnings of 33 cents per share, excluding some items, according to a Bloomberg survey.