Earnings doubled at Legg Quarterly, 9-month revenues boosted by acquisitions

January 18, 1996|By Bill Atkinson | Bill Atkinson,SUN STAFF

Thanks to the high-flying stock market, Legg Mason Inc. more than doubled its earnings in its fiscal third quarter to $9.2 million, the company said yesterday.

The Baltimore-based brokerage and investment banking company earned $26.2 million for the nine-month period, up 114 percent from the prior year.

"In this business you grab it when you can," said F. Barry Bilson, the company's chief financial officer.

The company's stock rose 12.5 cents yesterday to close at $27 a share.

Legg Mason posted per-share earnings of 63 cents in the quarter, and $1.91 for the nine months.

Revenues grew 32 percent to $122.5 million in the quarter, and 30 percent to $353.7 million for the nine months.

Gains were spurred by sharply higher revenues from the company's investment advisory and brokerage businesses. Commission revenues from the company's brokerage business jumped 37 percent to $41 million in the quarter, and revenues from investment advisory operations increased 57 percent to $33 million.

Raymond A. Mason, Legg Mason's chairman and chief executive, said the increase in the company's investment advisory business was driven by Battery March Financial Management, which the company acquired a year ago, Western Asset Management Co., and Legg Mason's family of 15 mutual funds.

Western Asset, an institutional fixed-income investment adviser, for example, grew to $18 billion in assets under management in December, up from $11 billion a year ago, Mr. Bilson said.

Legg Mason executives were pleased with such growth because one of their goals is to build the asset management business, so the company isn't forced to rely on commissions generated from buying and selling stocks.

Last year, Legg Mason made three acquisitions to build the asset management business. The company has $30 billion in assets under management.

"We have really tried to build and insulate the company from the daily Dow [Dow Jones industrial average] activity cycles," Mr. Bilson said.

While revenues soared, so did compensation and benefits, which grew 30 percent to $71 million in the quarter, and 27 percent to $202.6 million for the nine months.

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