Mutual fund manager Janus Capital Group (NYSE:JNS) reported a sharp turnaround in first-quarter earnings this morning, but investors greeted the news with a yawn. With the help of a steep $74 million drop in operating expenses, net income for the Denver-based money manager swung to a $19.6 million gain from a $22.1 million loss in the same period last year. The gain still missed analysts' targets, though, and excluding one-time items, adjusted earnings actually fell 39% to $0.11 per share. Revenues were also weak, dropping nearly 14% to $216 million.

The past few years have been bumpy for Janus, whose high-octane growth funds bled assets after being pummeled by the relentless sell-off in technology stocks. Massive redemptions carried assets -- and the fees they generate -- out the front door, and those that remained were dwindled even further by a declining market. Then, just as the company was getting back on its feet, it was entangled by the now-infamous market-timing scandal. Janus allowed its judgment to be clouded by kickbacks, and the ensuing maelstrom of negative publicity sent investors (and $35 billion of their assets) scampering for the exits in droves.

The company has weathered the storm, though, and the worst may now be in the past. It has been nearly a year since the company agreed to a $225 million settlement, the first step to restoring investor confidence. Part of the arrangement includes a compulsory fee reduction, which should help attract new business. And a pending $2.2 billion withdrawal from ING (NYSE:ING) should hopefully be the last high-profile redemption tied to the scandal. The firm has even launched two new funds, Janus Research Fund and Janus Triton Fund, both of which premiered in February.

I do not think that Janus' credibility has been irreparably damaged, but it will not be fully mended overnight, either. Assets under management, the lifeblood of a money manager, stand at $132.2 billion -- down about 9% from a year ago. About $7 billion in assets were shed during the first quarter, $2.6 billion from market depreciation, and the rest from net outflows. However, the number of equity funds showing positive flows did double from the prior quarter to 30%. Meanwhile, T. Rowe Price (NASDAQ:TROW), a fund complex with a more ethical track record, attracted more than $20 billion in net cash inflows last year.

Janus, along with Alliance Capital (NYSE:AC), Bank of America (NYSE:BAC), and other rivals, has one thing in its favor -- the notoriously short memory of most investors. Strong performance is the best incentive to help sway those who are unsure of whether they can safely again entrust their money to Janus. A few quarters of chart-topping returns will make past transgressions more easily forgiven -- and eventually forgotten.

In that regard, Janus is on the right track. After putting up some dismal performance figures in the past, three-fourths of Janus' equity funds now reside in the top half of the Lipper rankings for their respective category over the past three years.

There are a few rays of sunlight peeking through the storm clouds. A new management team is in place, fund performance is improving, and advertising has been ramped up. The company has also stepped up its distribution in the advisor channel, where the number of wholesesalers pushing Janus funds has increased from 16 to 25. Is it time for a rebound at Janus? The pendulum swings both ways.

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Fool contributor Nathan Slaughter owns none of the companies mentioned.