Janus Capital Group ( JNS) reported higher second-quarter earnings mostly because of a one-time gain from the sale of its remaining stake in a data processing company. Denver-based Janus earned $130.2 million, or 56 cents a share, in the three months to June 30, compared with $47.5 million, or 21 cents a share, in the year-ago period. Excluding the gain from the sale as well as other charges, the company's net income totaled $40.5 million, or 17 cents a share, compared with $50.5 million, or 22 cents a share last year. The company's results were in line with analysts' forecasts of 17 cents a share. Looking ahead, the company said fee reductions from a regulatory settlement involving its role in the mutual fund trading scandal and a decline in assets through June will adversely affect future quarterly results by 3 cents a share. The consensus forecast for the third quarter is 17 cents a share compared to 24 cents a share for the same period last year. Janus reached a $225 million settlement in April with state and federal regulators. As a result, investors have redeemed $28.5 billion in the past nine months. Operating income and margins improved slightly to $79.4 million and 33.8%, respectively, during the second quarter of 2004 compared with $76.9 million and 31.3% for the same period last year. Janus said second-quarter assets under management were $138.6 billion, down from $143.1 billion for the comparable 2003 quarter, a decrease of 3.1%. Janus Chairman and CEO Steve Scheid said the company made good strategic progress during the second quarter by improving fund performance, strengthening its balance sheet and streamlining its business model. He also said that Janus continues to pursue final approval of the agreements in principle reached with regulators and that, effective July 1, the company implemented certain management fee cuts required by some of the regulators.
"We're investing for the future because we believe in Janus," Scheid said. "We're putting additional emphasis on building our institutional and broker-dealer businesses and offering new products to investors who work with financial advisers. We're also investing in our brand by introducing a new ad campaign this fall."