(Reuters) – Investment manager Franklin Resources, better known as Franklin Templeton, beat Wall Street estimates for first-quarter profit on Friday as a rallying equities market boosted investment management fees.
WHY IT’S IMPORTANT
The company’s Western Asset Management unit, which chiefly manages fixed income portfolios, is under investigations by the U.S. Securities and Exchange Commission and the Commodity Futures Trading Commission regarding its former manager, Ken Leech.
The San Mateo, California-based investment manager, however, has benefited from an equities market rally, driven by optimism over tax cuts and deregulation under the Trump administration.
Earlier this week, peer Invesco beat Wall Street estimates for fourth-quarter profit due to higher investment management fees.
BY THE NUMBERS
Franklin Templeton ended the quarter with $1.58 trillion in assets under management, up 8% from a year ago.
The company’s total investment management fees, which is the largest contributor to its total operating revenue, rose 9% to $1.8 billion in the quarter.
Excluding one-time costs, Franklin’s profit was $320.5 million, or 59 cents per share, compared with analysts’ estimates of 53 cents per share, according to LSEG data.
Total net outflows widened to $50 billion, compared with $300 million a year ago.
MARKET REACTION
The company’s shares rose 2.7% to $20.7 in premarket trading.
(Reporting by Ateev Bhandari in Bengaluru; Editing by Vijay Kishore)
