Legg Mason Inc. on Monday posted a fourth-quarter profit ahead of Wall Street expectations and announced a restructuring plan it says will save up to $150 million by the end of 2012.
For the quarter ended March 31, the Baltimore-based asset manager posted net income of $63.6 million, or 39 cents per share, compared with a net loss of $330.2 million, or $2.33 per share, in the same quarter a year ago. The year-ago results included money market fund support charges of $606.4 million.
Revenue grew 9 percent to $671.4 on higher performance fees and increased assets under management.
Analysts surveyed by Thomson Reuters expected net income of 35 cents per share on revenue of $663.6 million.
Legg Mason said expenses for the quarter fell 15 percent to $565.6 million.
Assets under management at the end of the quarter grew to $684.5 billion from $632.4 billion at the same time last year.
For the year, Legg Mason reported net income of $204.4 million, or $1.32 per share, compared with a loss of nearly $2 billion, or $13.99 per share in fiscal 2009.
The year-ago period included pretax money market fund support charges of $2.3 billion and non-cash goodwill and intangible asset impairment charges of $1.3 billion.
Revenue fell 22 percent to $2.6 billion.
A restructuring plan and other initiatives announced by CEO Mark Fetting are expected to save $130 million to $150 million by the fourth quarter of fiscal 2010.
They include moving some shared services to investment affiliates but retaining at the corporate level retail distribution, capital allocation, and investing services.
The company also plans to put more money into international growth and expand capital available to seed products, Fetting said. The Americas distribution group will share in revenue from retail-based assets under management growth.
"The initiatives we outline today streamline our business model and will position the company for future growth as well as increase our operating efficiency and overall profitability," Fetting said in a statement.
The plans are expected to cost $190 million to $210 million over the next 18 months. The result will be improved profitability by the end of fiscal 2012, the company said.
Legg Mason shares rose $2.17, or 7.8 percent, to close at $29.95 amid a rally in the broader market. They added another 80 cents, or 2.6 percent, to $30.75 in aftermarket activity. The stock has ranged from $17.32 to $33.70 over the past year.
© Copyright 2013 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.