(RTTNews) - Thursday, asset management company Janus Capital Group Inc. (JNS: News ) reported a sharp decline in third quarter profit as operating expenses increased, affected by legal settlements and severance charges.

Janus's third quarter net income attributable to the company declined to $8.2 million from $25.4 million in the same quarter last year. Earnings attributable to common shareholders decreased to $0.05 per share from $0.16 per share last year.

On average, 12 analysts polled by Thomson Reuters expected the company to report earnings of $0.15 per share for the quarter. Analysts' estimates typically exclude special items.

The company noted that its quarterly results include operating charges from legal settlements and severance associated with the former CEO of $20.5 million and $12.1 million, respectively, partly offset by a gain of $5.8 million from the debt tender.

Revenues decreased 17% to $227.6 million from $275.4 million in the year-ago period, primarily because last year's plunging markets eroded the value of assets which the company manages, reducing management fees. Analysts expected revenues of $225.34 million for the quarter.
Operating margin for the quarter declined to 13.0% from 33.9% for the same quarter last year. Operating income for the quarter decreased to $29.6 million from $47 million in the year-ago period.

Operating expenses increased to $198 million from $182.1 million in the same quarter last year as a result of the legal settlements, severance charges and higher revenue-based expenses.

Average assets under management increased 12.9% to $143.1 billion from $126.7 billion in same quarter last year. The increase in firmwide assets in the quarter primarily reflects $20.0 billion of market appreciation and long-term net outflows of $600 million.

Janus is currently trading at $14.29, down $1.46 or 9.27%, on a volume of 3.36 million shares on the NYSE.

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by RTT Staff Writer

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