Fed’s Powell opens door to potential rate cuts at Jackson Hole
Investing.com -- Shares of Franklin Resources (NYSE: NYSE:BEN) climbed 11% following the release of their first quarter earnings, which surpassed analyst expectations. The company reported an adjusted earnings per share (EPS) of $0.59, which was $0.03 higher than the analyst estimate of $0.56. Revenue for the quarter was also strong at $2.25 billion, significantly exceeding the consensus estimate of $1.71 billion.
The increase in Franklin Resources’ stock can be attributed to the company’s robust financial performance, with a notable improvement in earnings compared to the same quarter last year. The adjusted net income for the quarter ending December 31, 2024, stood at $320.5 million, compared to $328.5 million for the quarter ended December 31, 2023. Despite the year-over-year (YoY) decline in adjusted net income, the company demonstrated progress in key growth areas.
Franklin Resources CEO Jenny Johnson highlighted the company’s ability to meet client needs despite market volatility, with long-term inflows improving by 34% from the prior year quarter. The quarter also saw positive net flows in equity, multi-asset, and alternatives, totaling $17 billion. However, the company experienced long-term net outflows of $50 billion, largely attributed to Western Asset Management (WAMCO). Excluding WAMCO, the company’s long-term net inflows were $18 billion and positive across every asset class.
Evercore ISI Analyst Glenn Schorr provided insights into the company’s financials, noting that while Franklin Resources faced significant outflows at its Western affiliate, there were positive trends such as higher gross sales and a solid unfunded pipeline. Schorr’s comment --though the rest of BEN flows are ok, WAMCO uncertainty probably keeps people on the sidelines for now -- reflects a cautious optimism about the company’s future growth potential amidst current uncertainties.
Investors appear to be responding to the company’s first-quarter performance with cautious optimism, recognizing the challenges at WAMCO but also noting the positive sales trends and the launch of a successful evergreen secondaries private equity fund. Franklin Resources’ commitment to strategic investment and expense management, along with its focus on enhancing shareholder value, seem to be key factors in the positive market response.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.