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Will High Performance Fees Aid Legg Mason (LM) Q4 Earnings?
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Legg Mason is scheduled to report fourth-quarter fiscal 2018 (ended Mar 31) results on Apr 25, after the market closes. This asset management company is expected to witness a rise in other service revenues, while distribution and service fees will likely register a decline.
Given the increase in assets under management (the Zacks Consensus Estimate of $775 billion shows 6.5% year-over-year rise) during the quarter, Legg Mason’s performance fees are projected to improve. The Zacks Consensus Estimate for performance fees of $30 million reflects 15.7% growth from the prior-year quarter. Nonetheless, management expects non-pass through (NPT) performance fees of $15-$25 million in the to-be-reported quarter.
Also, the Zacks Consensus Estimate for other service revenues of $1.13 million indicates a fall of 18.9% from the last-year quarter. However, distribution and service fees are anticipated to slip 11% year over year to $81 million.
Overall, Legg Mason is expected to record an increase in revenues. The Zacks Consensus Estimate for sales of $759.3 million indicates a rise of 5% year over year.
On the cost front, management predicts compensation ratio to be up 54-56%, reflecting seasonal compensation rise and lower NPT performance fees. Nonetheless, we expect overall operating expenses to trend upward as the company continues to invest in franchise.
Notably, the Zacks Consensus Estimate for earnings in the quarter to be reported has been revised nearly 2.7% downward over the last 30 days to 71 cents, with two estimates moving down. The estimate figure reflects a year-over-year decline of 22.8%.
According to our proven model, we cannot conclusively predict if Legg Mason will likely beat the Zacks Consensus Estimate this time. That’s because it doesn’t have the right combination of the two key ingredients — positive Earnings ESP and a Zacks Rank #3 (Hold) or better — to increase the odds of an earnings beat.
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 -1.41%.
Zacks Rank: Legg Mason currently carries a Zacks Rank #3, which increases the predictive power of ESP. However, we also need a positive ESP to be confident of an earnings beat.
Stocks That Warrant a Look
Here are some other stocks you may want to consider, as according to our model, these have the right combination of elements to post an earnings beat this quarter.
Cullen/Frost Bankers, Inc. (CFR - Free Report) has an Earnings ESP of +0.31% and carries a Zacks Rank of 3. It is slated to report results on Apr 26.
MB Financial Inc. has an Earnings ESP of +1.82% and carries a Zacks Rank of 3. It is set to report results on Apr 24.
Today's Stocks from Zacks' Hottest Strategies
It's hard to believe, even for us at Zacks. But while the market gained +21.9% in 2017, our top stock-picking screens have returned +115.0%, +109.3%, +104.9%, +98.6%, and +67.1%.
And this outperformance has not just been a recent phenomenon. Over the years it has been remarkably consistent. From 2000 - 2017, the composite yearly average gain for these strategies has beaten the market more than 19X over. Maybe even more remarkable is the fact that we're willing to share their latest stocks with you without cost or obligation.
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Will High Performance Fees Aid Legg Mason (LM) Q4 Earnings?
Legg Mason is scheduled to report fourth-quarter fiscal 2018 (ended Mar 31) results on Apr 25, after the market closes. This asset management company is expected to witness a rise in other service revenues, while distribution and service fees will likely register a decline.
Given the increase in assets under management (the Zacks Consensus Estimate of $775 billion shows 6.5% year-over-year rise) during the quarter, Legg Mason’s performance fees are projected to improve. The Zacks Consensus Estimate for performance fees of $30 million reflects 15.7% growth from the prior-year quarter. Nonetheless, management expects non-pass through (NPT) performance fees of $15-$25 million in the to-be-reported quarter.
Also, the Zacks Consensus Estimate for other service revenues of $1.13 million indicates a fall of 18.9% from the last-year quarter. However, distribution and service fees are anticipated to slip 11% year over year to $81 million.
Overall, Legg Mason is expected to record an increase in revenues. The Zacks Consensus Estimate for sales of $759.3 million indicates a rise of 5% year over year.
On the cost front, management predicts compensation ratio to be up 54-56%, reflecting seasonal compensation rise and lower NPT performance fees. Nonetheless, we expect overall operating expenses to trend upward as the company continues to invest in franchise.
Notably, the Zacks Consensus Estimate for earnings in the quarter to be reported has been revised nearly 2.7% downward over the last 30 days to 71 cents, with two estimates moving down. The estimate figure reflects a year-over-year decline of 22.8%.
Legg Mason, Inc. Price and EPS Surprise
Legg Mason, Inc. Price and EPS Surprise | Legg Mason, Inc. Quote
Here is what our quantitative model predicts:
According to our proven model, we cannot conclusively predict if Legg Mason will likely beat the Zacks Consensus Estimate this time. That’s because it doesn’t have the right combination of the two key ingredients — positive Earnings ESP and a Zacks Rank #3 (Hold) or better — to increase the odds of an earnings beat.
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 -1.41%.
Zacks Rank: Legg Mason currently carries a Zacks Rank #3, which increases the predictive power of ESP. However, we also need a positive ESP to be confident of an earnings beat.
Stocks That Warrant a Look
Here are some other stocks you may want to consider, as according to our model, these have the right combination of elements to post an earnings beat this quarter.
The Earnings ESP for SVB Financial Group is +1.38% and the stock carries a Zacks Rank of 3. The company is scheduled to release first-quarter results on Apr 26. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Cullen/Frost Bankers, Inc. (CFR - Free Report) has an Earnings ESP of +0.31% and carries a Zacks Rank of 3. It is slated to report results on Apr 26.
MB Financial Inc. has an Earnings ESP of +1.82% and carries a Zacks Rank of 3. It is set to report results on Apr 24.
Today's Stocks from Zacks' Hottest Strategies
It's hard to believe, even for us at Zacks. But while the market gained +21.9% in 2017, our top stock-picking screens have returned +115.0%, +109.3%, +104.9%, +98.6%, and +67.1%.
And this outperformance has not just been a recent phenomenon. Over the years it has been remarkably consistent. From 2000 - 2017, the composite yearly average gain for these strategies has beaten the market more than 19X over. Maybe even more remarkable is the fact that we're willing to share their latest stocks with you without cost or obligation.
See Them Free>>