Legg Mason announced after the market closed Tuesday that it expects its net income for the quarter ended Sept. 30 to come in at between 96 cents and $1.02 per diluted share, below analysts' consensus estimate of $1.16 per diluted share. That net income of between $138 million and $148 million would represent a decline from the $156 million Legg Mason reported in the previous quarter. Legg Mason blamed a 1% drop in revenues from the prior quarter on more activity in lower-margin mutual fund fixed-income products and roughly $12 million in "unanticipated mutual fund distribution fee expenses."
Legg Mason expects its assets for the quarter to be around $890 billion, an increase of 4% from the previous quarter's $855 billion, according to a news release.
Earlier this year, Legg Mason's stock tumbled when evidence emerged that cost savings from its merger with Citigroup Asset Management were coming in at a slower pace than analysts had anticipated. In the news release Tuesday, the firm said the integration of CAM "remains on schedule, and that it continues to expect to achieve the previously announced cost savings from that integration."
Before the company's announcement, Legg Mason's stock closed Tuesday at $105.31, up 3.2% from Monday's close.