Investment management firm Eaton Vance Corp. (EV: Quote) reported Wednesday a profit for the third quarter that declined 26 percent from last year, hurt by money outflows, lower margins and a decline in fee revenues amid the global economic uncertainty. Both earnings per share and quarterly revenues missed analysts' expectations.
"Accelerating outflows from our large-cap value strategy caused net flows to turn negative in the third quarter of fiscal 2012. Improving large-cap value performance and a robust pipeline of new institutional and sub-advisory opportunities give reason for optimism regarding flow trends in the coming months," Chairman and CEO Thomas Faust Jr. said in a statement.
Net outflows into long-term funds and separate accounts during the the third quarter was $1.4 billion, compared to $1.9 billion of net inflows in the year-ago quarter. Net outflows from Eaton Vance large-cap value mandates totaled $3.8 billion, which more than offset the $2.4 billion of net inflows into other long-term strategies in the quarter.
The Boston, Massachusetts-based asset manager reported net income of $50.21 million or $0.43 per share for the third quarter, lower than $68.07 million or $0.55 per share in the prior-year quarter.
On average, 12 analysts polled by Thomson Reuters expected the company to report earnings of $0.47 per share for the third quarter. Analysts estimate typically excludes one-time special items.
Eaton's revenues for the quarter declined 9 percent to $298.77 million from $327.07 million in the same quarter last year, and missed twelve Wall Street analysts' consensus estimate of $304.28 million by a whisker.
Eaton's investment advisory and administration fees decreased 7 percent, reflecting primarily a 4 percent decline in average assets under management and a modest decline in effective fee rates. Distribution and underwriter fees were down 17 percent, and service fee fees dropped 18 percent from a year ago.
Eaton Vance's operating margin for the quarter contracted 300 basis points to 32 percent from last year's 35 percent.
Eaton's assets under management as of the end of the third quarter was $192.9 billion, down 3 percent from $199.0 billion of managed assets as of the end of the prior-year quarter.
In Wednesday's regular trading session, EV is currently trading at $26.95, down $0.34 or 1.25% on a volume of 6,491 shares.
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by RTT Staff Writer
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