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Legg Mason (LM) to Report Q4 Earnings: What's in Store?
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Legg Mason Inc. is scheduled to report its fourth-quarter fiscal 2017 results on Apr 26, after the market closes.
The Baltimore, MD-based asset manager posted a negative earnings surprise of 21.9% in third-quarter fiscal 2017. The company reported net income of 50 cents per share, missing the Zacks Consensus Estimate of 64 cents. Higher expenses mainly affected the results. However, higher assets under management (AUM) and increased revenues were the tailwinds.
The company has a decent earnings surprise history as depicted in the chart below:
The company’s stock gained 20.7% in the quarter (ended Mar 31) compared with the Zacks categorized Investment Management industry’s 4.6% growth.
Earnings Whispers
According to our quantitative model, we cannot conclusively predict an earnings beat for Legg Mason in the upcoming results. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #3 (Hold) or better for this to happen, which is not the case here as elaborated below.
(You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.)
Zacks ESP: The Earnings ESP for Legg Mason is 0.00%. This is because both the Most Accurate estimate and the Zacks Consensus Estimate are 63 cents.
ZacksRank: Legg Mason’s Zacks Rank #3 increases the predictive power of ESP. However, we also need to have a positive ESP to be confident of an earnings beat.
What to Expect from Fiscal Q4 Results
The quarter recorded a strong performance of equity markets. Among others, the S&P 500 Index gained 4.3%. As a result, the company is likely to record a rise in AUM.
Despite the uncertainties and market volatility that prevailed in the quarter, we expect Legg Mason’s diversified nature of business to benefit. These conditions led to a surge in fixed-income trading activities, indicating higher revenues.
On account of an improving interest rate environment, management expects fee waivers to be around $25 million in the quarter.
Notably, management projects performance fees to be in the range of $5–$10 million. Further, acquisition and transition-related expenses are expected to be in the range of $3–$4 million in the to-be-reported quarter.
Notably, this investment manager’s activities during the quarter were not enough to win analysts’ confidence. The Zacks Consensus Estimate remained stable over the last seven days.
Stocks that Warrant a Look
Here are some stocks you may want to consider, as according to our model they have the right combination of elements to post an earnings beat this quarter.
Prosperity Bancshares, Inc. (PB - Free Report) has an Earnings ESP of +1.02% and a Zacks Rank #3. It is slated to report first-quarter results on Apr 26.
The Earnings ESP for Moody’s Corporation (MCO - Free Report) is +4.17% and it carries a Zacks Rank #2. The company is scheduled to release first-quarter results on May 5.
Zacks’ Best Private Investment Ideas
While we are happy to share many articles like this on the website, our best recommendations and most in-depth research are not available to the public.
Starting today, for the next month, you can follow all Zacks' private buys and sells in real time. Our experts cover all kinds of trades… from value to momentum . . . from stocks under $10 to ETF and option moves . . . from stocks that corporate insiders are buying up to companies that are about to report positive earnings surprises. You can even look inside exclusive portfolios that are normally closed to new investors.
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Legg Mason (LM) to Report Q4 Earnings: What's in Store?
Legg Mason Inc. is scheduled to report its fourth-quarter fiscal 2017 results on Apr 26, after the market closes.
The Baltimore, MD-based asset manager posted a negative earnings surprise of 21.9% in third-quarter fiscal 2017. The company reported net income of 50 cents per share, missing the Zacks Consensus Estimate of 64 cents. Higher expenses mainly affected the results. However, higher assets under management (AUM) and increased revenues were the tailwinds.
The company has a decent earnings surprise history as depicted in the chart below:
Legg Mason, Inc. Price and EPS Surprise
Legg Mason, Inc. Price and EPS Surprise | Legg Mason, Inc. Quote
The company’s stock gained 20.7% in the quarter (ended Mar 31) compared with the Zacks categorized Investment Management industry’s 4.6% growth.
Earnings Whispers
According to our quantitative model, we cannot conclusively predict an earnings beat for Legg Mason in the upcoming results. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #3 (Hold) or better for this to happen, which is not the case here as elaborated below.
(You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.)
Zacks ESP: The Earnings ESP for Legg Mason is 0.00%. This is because both the Most Accurate estimate and the Zacks Consensus Estimate are 63 cents.
Zacks Rank: Legg Mason’s Zacks Rank #3 increases the predictive power of ESP. However, we also need to have a positive ESP to be confident of an earnings beat.
What to Expect from Fiscal Q4 Results
The quarter recorded a strong performance of equity markets. Among others, the S&P 500 Index gained 4.3%. As a result, the company is likely to record a rise in AUM.
Despite the uncertainties and market volatility that prevailed in the quarter, we expect Legg Mason’s diversified nature of business to benefit. These conditions led to a surge in fixed-income trading activities, indicating higher revenues.
On account of an improving interest rate environment, management expects fee waivers to be around $25 million in the quarter.
Notably, management projects performance fees to be in the range of $5–$10 million. Further, acquisition and transition-related expenses are expected to be in the range of $3–$4 million in the to-be-reported quarter.
Notably, this investment manager’s activities during the quarter were not enough to win analysts’ confidence. The Zacks Consensus Estimate remained stable over the last seven days.
Stocks that Warrant a Look
Here are some stocks you may want to consider, as according to our model they have the right combination of elements to post an earnings beat this quarter.
UMB Financial Corporation (UMBF - Free Report) is scheduled to report first-quarter results on Apr 26. It has an Earnings ESP of +2.38% and a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Prosperity Bancshares, Inc. (PB - Free Report) has an Earnings ESP of +1.02% and a Zacks Rank #3. It is slated to report first-quarter results on Apr 26.
The Earnings ESP for Moody’s Corporation (MCO - Free Report) is +4.17% and it carries a Zacks Rank #2. The company is scheduled to release first-quarter results on May 5.
Zacks’ Best Private Investment Ideas
While we are happy to share many articles like this on the website, our best recommendations and most in-depth research are not available to the public.
Starting today, for the next month, you can follow all Zacks' private buys and sells in real time. Our experts cover all kinds of trades… from value to momentum . . . from stocks under $10 to ETF and option moves . . . from stocks that corporate insiders are buying up to companies that are about to report positive earnings surprises. You can even look inside exclusive portfolios that are normally closed to new investors.
Click here for Zacks' private trades >>