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Franklin Resources (NYSE:BEN) stock gapped up as much as 4.2% in Monday premarket trading after the asset manager delivered fiscal second-quarter earnings and revenue above Wall Street expectations, thanks to positive net flows across most of its long-term asset classes.
“Despite a difficult market backdrop exacerbated by stress in the regional banking sector, we continued to see positive momentum across our business in terms of long-term flows, relative investment performance, diversification by product and vehicle, and financial results,” said President and CEO Jenny Johnson.
Adjusted EPS of $0.61, topping the average analyst estimate of $0.56, rose from $0.51 in the prior quarter and fell from $0.96 a year earlier.
Total operating revenue of $1.93B, exceeding the $1.80B consensus, slid from $1.97B in Q1 and from $2.08B in the year-ago quarter.
Long-term net outflows came in at $3.7B, improving from $10.9B in Q1 and from $11.7B a year before. "This quarter, three of our four long-term asset classes – fixed income, multi-asset, and alternatives – generated positive net flows," Johnson pointed out, adding "flow trends improved across all geographies, with our Asia Pacific region reporting positive long-term net flows in the quarter."
Assets under management ended the quarter at $1.42T, up from $1.39T in Q1 and down from $1.48T in Q2 2022.
Investment management fees slipped to $1.57B from $1.63B in the previous quarter and from $1.65B a year ago.
Conference call at 10:00 a.m. ET.