Legg Mason Inc. reported yesterday that its earnings for the three months that ended June 30 were up 84 percent compared with those of the same quarter a year ago, as lower interest rates led to more revenue for the company's investment banking operations and the company's mortgage operation also grew strongly.
The Baltimore-based stock brokerage company said it earned $7.6 million during the quarter, the first of its fiscal year. That works out to 76 cents per fully diluted share, up from 43 cents in the same quarter of 1991.
"I think it's an unusually strong quarter," Legg Mason Vice Chairman John F. Curley Jr. said. "The [competing brokerage] firms that have announced their earnings so far have been up from a year ago but down from the first quarter of this year."
Legg Mason earned 66 cents a share in the first three months of this year.
"They're getting more profit than in the past from asset management and mortgages," said Perrin Long, a stock analyst who follows Legg Mason for First of Michigan Corp. in Detroit. "There's more stability to the earnings" than in more volatile businesses like stock brokerages, he said.
Legg Mason's biggest revenue gains in the quarter came in investment banking and in the category called "other," which includes Legg Mason's expanding mortgage business.
Mr. Curley said low interest rates helped spur refinancing of debts, which helped investment-banking revenue for issuers of municipal bonds and corporations.
"Both of them were strong, but public finance was particularly strong," he said.
Revenue in the "other" category grew more than 80 percent in the quarter but accounted for less than 7 percent of Legg Mason's revenue in the period. Mr. Long said he expects Legg Mason's earnings to slow for the rest of the fiscal year.
Three months ended 6/30/92
.. .. ..Revenue .. .. .Net .. Share
81,219,000 7,604,000 .. 0.76
'91 67,938,000 4,130,000 .. 0.43
% change .+19.5 . .. +84.1 .. +76.7