Alliance, Franklin Beat Targets
Alliance Capital (AC) shares rose Thursday after the money manager posted a stronger-than-expected fourth quarter.
For its fourth quarter ended Dec. 31, the New York company earned $67 million, or 82 cents a unit, up from the year-ago $10 million, or 13 cents a unit. The strong report came after Alliance earlier this month promised to beat Wall Street's expectations.
Analysts were originally expecting the company to earn 69 cents for the quarter, 3% higher than last year's operating profit of 67 cents. But Alliance said earlier in January that results would be stronger than expected, due to asset growth from both market appreciation and inflows. Alliance reported assets under management of $539 billion at the end of December, up 4.7% from Nov. 30 and up 12.9% from the year-earlier period.
Long-term net asset inflows for the three months ended Dec. 31 were $9 billion, with positive net asset flows across all channels -- institutional investment management, retail and private client. Net fixed-income asset inflows included nearly $7 billion from affiliates of AXA, a French company that owns Alliance Capital and other financial services outfits."Fourth-quarter earnings increased substantially, primarily reflecting a sharp increase in performance-based fees as well as the benefits to revenue from rising capital markets," said Alliance CEO Lewis Sanders. Separately, San Mateo, Calif.-based Franklin Resources (BEN), manager of the Franklin and Templeton mutual funds, beat analyst estimates due to a spike in assets under management in its fiscal first quarter. Net income at the company rose to $240 million, or 92 cents per share, compared with $172.3 million, or 67 cents per diluted share a year earlier. Analysts were expecting the company to earn 85 cents a share. On Thursday, Alliance rose 88 cents to $42.94, and Franklin rose 82 cents to $66.69.
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