The asset-based manager swung to a profit in the first quarter -- its first since December 2007 -- boosted by improving investment returns.
The news sent shares up more than 5% to $26.15 in after-market trading.
During the quarter, the company earned $50.1 million, or 35 cents a share, compared with a loss of $36.1 million, or 26 cents, in the year-ago period. Analysts expected earnings of 21 cents a share.
But revenue still tanked 42% to $613.1 million, while assets under management fell 29% to $656.9 billion from $922.8 billion last year.
"Legg Mason generated strong cash income, significantly reduced operating expenses, and reported sequential increases in assets under management at most of our affiliate companies, driven by debt and equity market appreciation and a reduction in outflows," Chairman amd CEO Mark R. Fetting said in a statement.
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