Janus Capital Group Inc.’s second-quarter profits tumbled 80 percent after investors pulled money from the U.S. company’s mutual funds – as they have for four consecutive years.
Net income was $25.7 million, or 12 cents a share, down from $126.1 million, or 54 cents, a year earlier, the Denver-based company said Thursday in a statement. Janus had a $228 million pretax gain last year from selling its stake in DST Systems Inc.
Steve Scheid, who took over from Mark Whiston as chief executive in April 2004, said on a conference call that net outflows will amount to about $2 billion in the second half, prompting him to cut costs.
Revenue fell for a fourth straight quarter, dropping 11 percent to $229.3 million, as assets declined 3.8 percent from a year earlier to $130.3 billion.
Janus “showed no real progress in their attempts to turn core flows positive in 2005,” Morgan Stanley analyst Chris Meyer said in a report Thursday. Meyer rates Janus “underperform.”
Net outflows in the quarter were $2.1 billion, as ING Groep NV removed $2 billion in April to complete a total of $4 billion in withdrawals.
ING decided to stop investing with Janus after a performance review and pressure from clients.
Mutual-fund investors removed $1.1 billion in the quarter.
According to Financial Research Corp., fund shareholders have taken out money every month since June 2001.
Investors in the company’s adviser-sold unit, including ING, pulled $4.2 billion. Institutions added $3.2 billion, primarily in Enhanced Investment Technologies, a quantitative-management unit.
“We showed increasing stability,” Scheid said on the call with analysts and investors. “We’re still below our long-term expectations and still have some work to do.”
