Eaton Vance Misses Views

Eaton Vance's(EV Quote) fiscal fourth-quarter earnings were up 62% as increased assets under management boosted management fees.

The Boston-based money manager's net income for the three months ended Oct. 31 increased to $61.38 million, or 47 cents per diluted share, from $38.53 million, or 30 cents per diluted share, for the same period last year.

The results fell short of Wall Street's expectations; analysts polled by Thomson First Call were looking for net income of 49 cents per diluted share.

Earnings were reduced by 5 cents per diluted share as a result of costs associated with the management reorganization of Eaton Vance's distribution arm as well as a loss realized on an interest-rate lock entered into in connection with the issuance of 10-year senior notes in September.

Eaton Vance's operating expenses also increased during the quarter compared with the same period last year, as compensation expenses rose by 28%.

The company's assets under management rose 25% to $32.8 billion by the end of October, up from $128.9 billion a year earlier. It said that $22.9 billion of the growth represented new money in its long-term mutual funds separate account net inflows, while $11.9 billion was attributable to market appreciation.

Higher assets under management drove fourth-quarter revenue growth of 29% to $293.8 million from $227.3 million. Revenue was also bolstered by a 9% increase in distribution and underwriter fees, while service fee revenue grew by 20%.