) -- Asset manager
was down more than 4% in the pre-market on Thursday after missing a Street estimate of an expected 31 cent net gain in its fiscal third quarter 2010, while also reporting a drop in assets under management.
Legg Mason reported net income of 28 cents per share on net income of $45 million. In the third quarter, slightly higher income had resulted in a 30-cent-per-share gain. Real estate losses contributed an 11-cent loss to the earnings.
Assets under management were $681.6 billion, down 3% from $702.7 billion at September 30, 2009, driven by fund outflows, and were down 2% from the end of 2008.
Revenues were also down from the year ago level by $30 million -- $720 million versus $690 million.
Legg Mason CEO Mark Fetting tried to focus investors on investment performance and not the outflows from Legg Mason funds. "While outflows increased this quarter, stronger performance at Western Asset and Permal led to substantially higher performance fees."
Total outflows were $33 billion the quarter, led by fixed income outflows of $24 billion. Fixed income represents 54% of Legg Mason's asset base.
However, Fetting stopped short of saying that the Legg Mason outflow situation could change immediately: "We are cognizant of the fact that it takes some time for flows to follow performance, and we are working hard in conjunction with our distribution teams to position ourselves to capture assets as improved performance continues to reflect in our medium- and longer-term numbers."
-- Reported by Eric Rosenbaum in New York.
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