DENVER—Although Janus Capital Group Inc. has lost nine portfolio managers this year, the financial services company will succeed as it repositions itself to meet consumer demand, CEO Gary Black said Thursday.
Black spoke as Janus Capital reported a 59 percent drop in net income for the third quarter, citing an impairment charge related to a plan to sell its printing business.
In line with industry trends, the Denver-based company has adopted an advice-driven philosophy resulting in fewer individually managed products and more team and co-managed products.
“Losing investment talent is never easy,” Black told analysts during a conference call. “That said, we have a very deep bench and we have the utmost confidence in our success.”
Under the new strategy, portfolio managers have been asked to devote more time to relationships with clients, Black said. In addition, compensation has been linked to overall company success.
“Will we lose any additional folks? It’s hard to tell,” he said. “Hopefully, people subscribe to the changes in business model that we put in place.”
For the quarter ending Sept. 30, net income totaled $12.2 million, or 7 cents per share, compared with from $29.5 million, or 15 cents per share, in the third quarter of 2006.
Janus Capital reported an after-tax impairment charge of 21 cents per share related to Rapid Solutions Group, a printing business it plans to sell. Excluding that charge, net income was $50.8 million, or 29 cents per share.
Revenue increased to $284.6 million in the most recent quarter from $229 million in the year-ago quarter.
Analysts surveyed by Thomson Financial had forecast, on average, earnings of 27 cents per share on revenue of $296.4 million for the third quarter. The analysts do not always include impairment charges in earnings estimates.
Janus Capital does not break out nine-month results.
Total assets under management were $208 billion as of Sept. 30, a 9 percent increase from the $190.6 billion as of June 30.
Janus Capital appears to be headed in the right direction with its new strategy, Morningstar analyst Rachel Barnard said, adding, “I think Janus really needs to focus on the Janus brand for the long-term and their investment process.”
Janus Capital’s shares rose 53 cents to $32.93 a share in Thursday trading.
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