Sanders Morris Drops Bond Unit

Sanders Morris Harris ( SMHG) fell 11% in after-hours trading following the announcement of second-quarter setbacks.

Sanders Morris set plans to close a unit and to take a $4.5 million goodwill-impairment charge for the decline of a shrinking money-management operation.

The Houston-based asset manager plans to close most of the fixed-income activities it staffed with former Advest bond-department employees at the end of 2005. Sanders will exit the mortgage-backed agency and high-grade corporate bond businesses in New York. The company estimates its second-quarter operating losses in the New York Fixed Income Division were approximately $2.2 million, or 7 cents a diluted share.

The company also says assets at its Charlotte Capital small-cap value money-management affiliate have fallen to $173 million from $429 million at the end of 2004. As a result, SMHG will take a goodwill-impairment charge of $4.5 million, or 14 cents per diluted share. It will take the noncash goodwill-impairment charge as part of its second-quarter results.

The core high-yield and syndicate activities will continue, as will the profitable Houston Fixed Income Division.

Sanders Morris says its primary operating businesses, asset/wealth management and capital markets, did well in the second quarter. It expects to release earnings, including the impact of the closed or impaired activities, around Aug. 9.

Shares fell $1.66 late Friday to $13.

More from Stocks

General Electric's Boot From the Dow: Is This as Bad as It Can Get?

General Electric's Boot From the Dow: Is This as Bad as It Can Get?

News From Starbucks and General Electric Leaves Their Investors Up in Arms

News From Starbucks and General Electric Leaves Their Investors Up in Arms

Facebook Messenger Could Bring in Billions of Dollars -- Here's How

Facebook Messenger Could Bring in Billions of Dollars -- Here's How

How to Invest in Cannabis - In Its Many Forms

How to Invest in Cannabis - In Its Many Forms

5 Stocks That Are Screaming Buys Right Now

5 Stocks That Are Screaming Buys Right Now