Waddell & Reed Financial, Inc. (NYSE: WDR) today reported third quarter net income of $40.5 million, or $0.47 per diluted share, compared to net income of $34.2 million, or $0.40 per diluted share, in the second quarter of 2010 and net income of $33.4 million, or $0.39 per diluted share, during the third quarter of 2009.
Sales during the quarter totaled $4.7 billion, compared to sales of $5.3 billion during the second quarter and sales of $5.1 billion during the third quarter of 2009. Net inflows were $658 million, compared to inflows of $731 million during the previous quarter and inflows of $2.4 billion during the same period last year.
On October 14, 2010, the Board of Directors of Waddell & Reed Financial, Inc. approved an increase in the quarterly dividend on its Class A common stock to $0.20 per share. This represents an increase of 5.3% over the previous dividend per share rate. The dividend is payable on February 1, 2011 to stockholders of record as of January 3, 2011. “The increase in dividend reflects our commitment to using free cash flow in a manner consistent with enhancing stockholder value,” said Henry J. Herrmann, chairman and chief executive officer of Waddell & Reed Financial, Inc.
Business DiscussionManagement commentary “Our comprehensive product line, coupled with solid long-term investment performance, provided our advisors and distribution partners with a number of attractive alternatives to satisfy clients’ investment goals,” said Herrmann. “Despite poor investor sentiment toward equities, Waddell & Reed continued to gain market share; inflows during the quarter represent annualized organic growth of 3.9% compared to an estimated 2.6% for the industry.” Advisors channel Quarterly sales in our Advisors channel declined 12% sequentially to $839 million and improved 4% compared to the same period last year. Net outflows of $137 million during the quarter compare to inflows of $100 million during the previous quarter and inflows of $138 million during the third quarter of 2009. Flows turned negative sequentially principally as a result of a $110 million internal exchange between distribution channels.