Legg Mason Goes Negative

Seth Jayson, The Motley Fool
Updated

Legg Mason (NYS: LM) reported earnings on Feb. 1. Here are the numbers you need to know.

The 10-second takeaway
 For the quarter ended Dec. 31 (Q3), Legg Mason met expectations on revenues and whiffed on earnings per share.

Compared to the prior-year quarter, revenue increased and GAAP earnings per share dropped to a loss.


Gross margins dropped, operating margins increased, net margins dropped.

Revenue details
 Legg Mason reported revenue of $673.9 million. The 12 analysts polled by S&P Capital IQ anticipated revenue of $677.6 million on the same basis. GAAP reported sales were 7.5% higher than the prior-year quarter's $627.0 million.

Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates.

EPS details
 EPS came in at $0.70. The six earnings estimates compiled by S&P Capital IQ averaged $0.78 per share. GAAP EPS were -$3.45 for Q3 versus $0.20 per share for the prior-year quarter.

Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.

Margin details
 For the quarter, gross margin was 33.0%, 280 basis points worse than the prior-year quarter. Operating margin was 14.9%, 450 basis points better than the prior-year quarter. Net margin was -67.3%, 7,180 basis points worse than the prior-year quarter.

Looking ahead
 Next quarter's average estimate for revenue is $644.4 million. On the bottom line, the average EPS estimate is $0.75.

Next year's average estimate for revenue is $2.59 billion. The average EPS estimate is $2.17.

Investor sentiment
 The stock has a three-star rating (out of five) at Motley Fool CAPS, with 802 members out of 877 rating the stock outperform, and 75 members rating it underperform. Among 343 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 322 give Legg Mason a green thumbs-up, and 21 give it a red thumbs-down.

Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Legg Mason is hold, with an average price target of $26.93.

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The article Legg Mason Goes Negative originally appeared on Fool.com.

Seth Jayson had no position in any company mentioned here at the time of publication. You can view his stock holdings here. He is co-advisor ofMotley Fool Hidden Gems, which provides new small-cap ideas every month, backed by a real-money portfolio. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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