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Franklin Resources, Inc. operates as a global investment management organization. The company offers investment solutions under the Franklin, Templeton, Mutual Series, Bissett, Fiduciary Trust and Darby Overseas names. BEN manages investment vehicles for individuals, institutions, pension plans, trusts, partnerships and other clients. The company has offices in 29 countries and offers investment solutions and services in more than 100.
Since BEN made its debut as a Growth and Income pick on Nov 14, the stock has gained over 12%. Much to investors delight the company is still a Zacks #1 Rank stock, thanks in no small part to its strong history of exceeding analysts earnings expectations coupled with earnings estimates trending higher.
One would have to go all the way back to the second quarter of fiscal 2003 to uncover a quarter in which BEN produced a negative earnings surprise (it missed by only a penny). The company beat the Streets earnings estimate for the past nine quarters by an average margin of 10.2%. In five of the nine quarters, the company surprised by a double-digit percentage. Moreover, BEN met or topped the consensus estimate for 15 consecutive quarters, producing 13 positive surprises during this period of time.
On Jan 25, BEN reported first-quarter fiscal 2007 profits of $426.8 million, or $1.67 per share, compared with profits of $318.0 million, or $1.21 per share in the prior-year period. The result amounted to a 10.6% positive earnings surprise with analysts expecting $1.51 per share. Operating income jumped 25.6% to $508.1 million from $404.6 million in the first quarter of fiscal 2006. At the end of the quarter, assets under management rose 19.0% and totaled $552.9 billion, versus $464.8 billion last year.
BEN increased revenues for the past seven years and grew profits for the past four. Earnings per share are projected to grow 16% over the next 3-5 years. The industry is expected to grow at a 14% clip.
Consensus estimates for this quarter are up six cents to $1.59 over the past 30 days, while estimates for next quarter jumped five cents to $1.65. Seven analysts submitted upward revisions for this quarter and six did so for next quarter. Profit forecasts for this year have risen 33 cents to $6.55 (11 analysts boosted their estimates) and are up 44 cents to $7.37 (seven analysts upped their forecasts) for next year over the past month.
On Dec 13, the Board of Directors declared a quarterly cash dividend of 15 cents per share. The payment represents a 25% increase over the dividends paid for the prior quarter and for the same quarter last year. BEN has instituted an annual dividend increase every year since 1981. The company is currently yielding 0.50%.
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