Legg Mason Inc. said yesterday that its just-completed third fiscal quarter was the second-most-profitable quarter in the company's history.
The Baltimore brokerage and money-management company reported earning $41.3 million, up 17 percent from the $35.3 million reported for the third quarter of 1999. Diluted earnings per share were 61 cents, up 13 percent from 54 cents per diluted share posted for the 1999 quarter.
"We couldn't expect much better performance from Legg Mason," said Michael Flanagan, a brokerage analyst at Financial Service Analytics Inc. in Philadelphia.
"I think Legg Mason has demonstrated again the stability as well as the strength of their earnings during weak markets."
Revenue in the quarter, which ended Dec. 31, rose to $349.1 million, up 11 percent from $313.3 million in the 1999 period.
Raymond A. "Chip" Mason, chairman and chief executive of the company, said the quarter was especially strong in asset management and investment banking.
Revenue from investment-advisory and related fees was $165.6 million in the quarter, up from $143.7 million a year earlier.
Revenue from investment banking jumped to $15.7 million from $11.8 million.
"Despite a pretty choppy stock market during the greater part of this quarter, we did come in with solid results," Mason said. The quarter reported yesterday was the second best in the company's 102-year history in terms of net revenue, net income and earnings per share, Mason said.
It also marks the 38th consecutive quarter in which Legg Mason's assets under new management have increased, he said.
"We're trying to guide and direct this company toward stable earnings," Mason said, "so that you can look at our profitability as a consistent profitability."
62 cents a share predicted
Analysts had been predicting earnings per share at an average of 62 cents, a penny higher than what Legg Mason reported, according to Zacks Investment Research.
Flanagan, however, said the earnings topped his expectations. Nine of the brokerage companies he follows have reported earnings for quarters ending in November and last month, and Flanagan said Legg Mason has fared better than most.
"It was a terrific quarter for Legg Mason," Flanagan said, "and a weak quarter for the industry."
Shares of Legg Mason rose 81 cents to $54.94 yesterday.