The 10-second takeaway
For the quarter ended June 30 (Q1), Legg Mason beat expectations on revenues and met expectations on earnings per share.
Compared to the prior-year quarter, revenue grew. Non-GAAP earnings per share increased. GAAP earnings per share grew.
Margins increased across the board.
Legg Mason recorded revenue of $670.4 million. The 11 analysts polled by S&P Capital IQ predicted sales of $654.0 million on the same basis. GAAP reported sales were 6.3% higher than the prior-year quarter's $630.7 million.
Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates.
EPS came in at $0.68. The eight earnings estimates compiled by S&P Capital IQ averaged $0.69 per share. Non-GAAP EPS of $0.68 for Q1 were 6.3% higher than the prior-year quarter's $0.64 per share. GAAP EPS were $0.38 for Q1 compared to -$0.07 per share for the prior-year quarter.
Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.
For the quarter, gross margin was 30.4%, 20 basis points better than the prior-year quarter. Operating margin was 12.5%, 70 basis points better than the prior-year quarter. Net margin was 7.1%, 860 basis points better than the prior-year quarter. (Margins calculated in GAAP terms.)
Next quarter's average estimate for revenue is $649.9 million. On the bottom line, the average EPS estimate is $0.84.
Next year's average estimate for revenue is $2.63 billion. The average EPS estimate is $3.29.
The stock has a three-star rating (out of five) at Motley Fool CAPS, with 789 members out of 866 rating the stock outperform, and 77 members rating it underperform. Among 318 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 303 give Legg Mason a green thumbs-up, and 15 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 $32.57.
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