plunged nearly 20% Tuesday after the money-management firm reported a wider quarter loss on expenses related to reducing its exposure to risky investment vehicles.
The company also announced that it would slash its dividend 88% to 3 cents a share.
In morning trading Tuesday, Legg Mason's stock had tumbled nearly 20%, or $4.38, to $18.15, on heavy volume.
The Baltimore company said it lost $325.1 million, or $2.29 a share. Those results beat analysts' estimates of a $2.33 a share loss, but were wider than the prior year's loss of $255.5 million, or $1.81 a share.
Legg Mason said the charges associated with eliminating its positions in structured investment vehicles, or SIVs, amounted to $367.4 million, or $2.59 a share, in the quarter.
Total operating revenue, the company said, dropped 42% to $617.2 million from $1.07 billion in the year-ago period. Analysts were looking for revenue of $611.1 million.
Legg Mason attributed the revenue decline to a fall-off in advisory fees and a 33% drop in the value of its assets under management compared with the year-ago period. Hurt by the bear market and by customer redemptions, the firm said it had assets under management of $632.4 billion as of March 31.
"We realized significant losses in the quarter, but we eliminated our entire SIV exposure and we managed our balance sheet without external assistance," Legg Mason's chairman and CEO, Mark Fetting, said in a statement. "Overall, shareholders deserve better results, and we are determined to pick up the pace of our own recovery."
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