Janus Capital Group Inc., owner of the Janus, Perkins and Intech fund families, said second-quarter profit increased 39 percent as rising stock markets damped the impact of investor withdrawals.
Net income rose to $41.9 million, or 23 cents a share, from $30.2 million, or 17 cents, a year earlier, the Denver-based company said in a statement Thursday. Analysts had expected earnings of 23 cents a share, according to the average of eight estimates in a Bloomberg survey.
Janus benefited from a surge in global stocks from September through February. Measured by the MSCI AC World Index, stocks rose 27 percent in the year ending June 30, boosting client assets. That helped counter the firm’s eighth straight quarter of redemptions as investors withdrew $3.1 billion.
“It’s mostly in line with our expectations both in terms of earnings and from the fund flows standpoint,” Jason Weyeneth, an analyst in New York with Sterne, Agee & Leach Inc., said in a telephone interview. He expected the company to earn 22 cents a share.
Earnings were reduced by $1.83 million in the quarter because of underperformance relative to benchmarks at 12 funds, which triggered fee reductions, according to a presentation to analysts. That amount may grow to $16.4 million by the first quarter of next year if fund performance doesn’t improve and assuming assets remain steady, Janus said in the presentation.
“That would be a significant hit to revenue,” Michael Kim, an analyst with Sandler O’Neill & Partners LP in New York, said in an interview.
