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Eaton Vance 2nd-quarter Profit Falls 52 Percent

The Associated Press

BOSTON (AP) — Investment manager Eaton Vance Corp. on Wednesday said its fiscal second-quarter profit fell 52 percent as market declines continued to chip away at the value of the assets it manages, pushing down revenue for its advisory services.

For the three months ended April 30, Eaton Vance earned $25.8 million, or 22 cents per share, compared with $53.2 million, or 43 cents per share, in the prior year.

The per-share figures reflect a 3 percent decline in the number of outstanding shares year-over-year.

Revenue fell 27 percent to $198.4 million from $273.4 million last year.

Per-share profit narrowly beat expectations from analysts polled by Thomson Reuters, who forecast 21 cents per share. But results fell short of Wall Street's expectation for revenue of $205 million.

Eaton Vance's largest revenue source, investment advisory and administration, dropped 24 percent to $153.2 million. The company said the decline reflects a 21 percent decrease in average assets under management, along with a modest decline in its average investment advisory fee rate.

Year over year, assets under management fell 20 percent, to $127.2 billion, from $159.1 billion.

Distribution and underwriter fees decreased 42 percent to $18.7 million, due to a decrease in average fund assets that pay these fees. Service fee revenue slid 33 percent to $25.6 million, due to a decrease in average fund assets subject to service fees.

The revenue decline was partially offset by a 14 percent reduction in operating expenses from last year, to $153.3 million. That included an 11 percent cut in compensation costs, mostly reflecting decreases in bonuses, commissions and stock-based compensation.

A total of $800 million flowed into Eaton Vance's long-term funds and separate accounts during the quarter.

In afternoon trading, Eaton Vance shares fell $3.51, or 12 percent, to $25.83. Volume was heavier than normal trading. The stock has moved between $11.86 and $44.40 in the past 52 weeks, and began the day up about 39 percent since the start of the year.