The mutual fund trading scandals took their toll on 2003 earnings of publicly traded asset management companies.
While some companies took it on the chin, others are rebounding remarkably well now that they've rid themselves of the specter of future demands by New York Attorney General Eliot Spitzer and the Securities and Exchange Commission.
Here's how it looks:
-- Putnam Investments, Boston, the asset management unit of Marsh & McLennan Cos. Inc., New York, reported 2003 revenue declined 8% to $2 billion, while operating income declined 10% to $503 million. The firm was hit with $54 billion in net redemptions in the fourth quarter, and still faces the prospect of undetermined penalties owed to the SEC.
-- Janus Capital Group Inc., Denver, earned 91 cents a diluted share in 2003, compared with $1.08 in 2002. The results included a $71.8 million charge related to the mutual fund investigation, plus restructuring costs. Janus officials admit that charge might not be adequate to meet all claims, and analysts fear the company is on a downward spiral.
-- AMVESCAP PLC, London, hit by tough times for growth stocks and the weakening dollar, reported that its 2003 profit fell 19% to $481.1 million. Officials at the firm, the parent of Atlanta-based INVESCO, also said the manager would take a charge of $41.6 million because of legal costs relating to the U.S. mutual fund investigation.
-- Alliance Capital Management Holding LP, New York, reported net income dropped 52% to $1.01 a share in 2003 because of charges for legal expenses and a $250 million settlement related to improper trading practices. However, assets under management were up 22.8% to $475 billion, and its stock appears undervalued to some analysts.
-- Franklin Templeton Investments, San Mateo, Calif., also implicated in the market-timing scandal, reported its quarterly profit rose to $152.1 million for the quarter ended Dec. 31, up 38% from $109.8 million in the same period last year. Assets under management jumped 31% to $336.7 billion as of Dec. 31, from the year before, and the firm appears poised for growth.