Franklin Resources (BEN) Misses Q4 EPS by 11c, Revenues Beat

Franklin Resources (NYSE: BEN) reported Q4 EPS of $0.56, $0.11 worse than the analyst estimate of $0.67. Revenue for the quarter came in at $1.71 billion versus the consensus estimate of $1.42 billion.

“While fiscal 2020 presented many challenges to the economy, our industry, and our business, it was also marked by exciting new opportunities for the firm,” said Jenny Johnson, President and CEO of Franklin Resources, Inc. “Of course, the most significant of those being the acquisition of Legg Mason and its specialist investment managers ("SIMs"). In a single transaction, we acquired multiple companies that brought strategically important investment capabilities to Franklin Templeton, while maintaining a strong balance sheet.

“Since the close of this historic transaction, which was achieved two months sooner than our originally projected timeline, we have made remarkable progress becoming one company. As we anticipated, client reaction to the acquisition has been very positive. Importantly, our global distribution team is now in place and is already able to cross-sell investment products from both legacy organizations across retail and institutional channels globally. We’re in position to seize the opportunity to deepen relationships and expand strategic partnerships, as we’ve seen reinvigorated interest in our broader range of investment capabilities. Furthermore, we have appointed certain SIM leaders to global or regional leadership roles in different areas of the company to fully reinforce our strong alignment, our shared focus, and commitment to each other.

“As a firm, we’re already seeing the benefits of adding world-class franchises to an already strong set of investment capabilities. Case in point, U.S. fixed income attracted record net flows of $5.7 billion in the quarter. We were pleased to see strong long-term net flows for Western Asset, which reached $410 billion in long-term assets and $478 billion in total assets, both their highest level in over a decade. With the addition of Clarion Partners, along with Benefit Street Partners and K2 Advisors, the alternatives asset class recorded its fifth consecutive quarter of net inflows, and now representing 9% of assets under management at $124 billion. In addition, Franklin Equity Group continues to generate strong performance and attract inflows, highlighted by Franklin DynaTech Fund with $4.4 billion of net inflows for the year, while more than doubling its assets under management to over $18 billion.

“Our world and our lives continue to be profoundly altered by the impact of the COVID-19 pandemic. I am extremely proud and appreciative of our employees who rose to meet the extraordinary challenges this year has presented. We have kept our focus squarely on our clients, whose long-term financial aspirations are at the center of all we do.”

For earnings history and earnings-related data on Franklin Resources (BEN) click here.

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