The 10-second takeaway
For the quarter ended March 31 (Q4), Legg Mason beat expectations on revenues and beat expectations on earnings per share.
Compared to the prior-year quarter, revenue grew slightly. Non-GAAP earnings per share dropped. GAAP earnings per share contracted significantly.
Gross margins increased, operating margins dropped, net margins contracted.
Legg Mason tallied revenue of $667.8 million. The 13 analysts polled by S&P Capital IQ predicted sales of $645.7 million on the same basis. GAAP reported sales were the same as the prior-year quarter's.
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 $0.52. The 10 earnings estimates compiled by S&P Capital IQ forecast $0.46 per share. Non-GAAP EPS of $0.52 for Q4 were 3.7% lower than the prior-year quarter's $0.54 per share. GAAP EPS of $0.23 for Q4 were 57% lower than the prior-year quarter's $0.54 per share.
Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.
For the quarter, gross margin was 32.6%, 320 basis points better than the prior-year quarter. Operating margin was 6.4%, 450 basis points worse than the prior-year quarter. Net margin was 4.4%, 730 basis points worse than the prior-year quarter. (Margins calculated in GAAP terms.)
Next quarter's average estimate for revenue is $654.9 million. On the bottom line, the average EPS estimate is $0.75.
Next year's average estimate for revenue is $2.66 billion. The average EPS estimate is $3.26.
The stock has a three-star rating (out of five) at Motley Fool CAPS, with 797 members out of 874 rating the stock outperform, and 77 members rating it underperform. Among 318 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 300 give Legg Mason a green thumbs-up, and 18 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 $27.27.
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