SAN MATEO, Calif. - Franklin Resources, Inc. (NYSE: NYSE:BEN), a global investment management firm, reported second-quarter earnings of $0.56 per share, slightly missing analyst expectations by $0.02. However, the company's revenue for the quarter was $2.15 billion, surpassing the consensus estimate of $1.66 billion.
The company's adjusted net income for the quarter ended March 31, 2024, was $306.6 million, a decrease from the previous quarter's $328.5 million and slightly down from $316.7 million in the same quarter last year. Franklin Resources also reported adjusted operating income of $419.6 million, compared to $417.0 million in the previous quarter and a decrease from $440.2 million year-over-year (YoY).
President and CEO Jenny Johnson attributed the company's performance to efforts in deepening client relationships and diversifying the firm, with positive contributions across various asset classes and geographies. She highlighted the company's long-term net inflows of $6.9 billion, with fixed income, multi-asset, and alternative assets leading the inflows.
The acquisition of Putnam Investments was also noted as a significant contributor to the company's investment capabilities and presence in the insurance and retirement channels.
Despite the positive revenue outcome, Franklin Resources experienced a YoY decline in operating income, which dropped by 49% to $129.3 million, and a decrease in net income by 36% to $124.2 million. The company's operating margin also contracted from 13.2% in the same quarter last year to 6.0%.
Total assets under management (AUM) increased by 13% during the quarter to $1,644.7 billion, largely due to the acquisition of Putnam Investments and positive net market changes. The company's institutional pipeline also grew to nearly $20 billion in won-but-unfunded mandates.
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