UPDATE: Janus Shares Hit All-Time Low As 4Q Net Drops 60%
January 22 2009 - 1:24PM
Dow Jones News
Janus Capital Group Inc.'s (JNS) stock hit an all-time low
Thursday, after the asset manager reported that fourth-quarter net
income dropped 60% on plunging management fees. Shares of other
asset managers were also trading sharply lower.
Janus shares recently traded down 60 cents, or 10%, at $5.31.
The company also announced it's shuttering all its institutional
money market funds by April 30, in order to focus on core
businesses.
Janus' problems are another example of an awful stretch for
asset managers.
BlackRock Inc. (BLK), the largest U.S. asset manager, reported
Wednesday an 84% drop in fourth-quarter net income, also because of
lower revenue from fees.
BlackRock's stock was down more than 5% Thursday, as were shares
of other asset managers Franklin Resources Inc. (BEN) and T. Rowe
Price Group Inc. (TROW).
Money managers across the board struggled amid falling asset
values, investor redemptions from mutual funds and declining profit
margins, as analysts correctly projected such companies would book
some of the worst numbers in years.
Janus reported net income of $7.8 million, or 5 cents a share,
down from $19.7 million, or 12 cents a share, a year earlier.
Revenue slumped 43% to $177.1 million on a similar decline for
investment-management fees, the bulk of Janus' revenue.
Analysts' estimates were for per-share earnings of 3 cents a
share on revenue of $203 million, according to a poll by Thomson
Reuters.
Total assets under management fell 40% from a year earlier and
23% during the quarter, thanks to the market slump and
outflows.
Some of Janus' biggest funds have been hurt by big bets on
financials, energy and other once-hot sectors. The Janus Twenty
fund loaded up on Lehman Brothers Holdings Inc. (LEHMQ) right
before it collapsed last fall. Janus also held big stakes in
American International Group Inc. (AIG) and Fannie Mae (FNM).
Janus, which has seen its stock lose more than 80% of its value
since early October, has recently cut costs by slashing its work
force by about 9% and halted its stock buyback program.
Despite the closing of its money market funds, Janus has
targeted some areas for expansion. Last month, it bought an
additional 50% ownership interest in value manager Perkins, Wolf,
McDonnell and Co. LLC. The $90 million deal gives Janus an 80%
stake in the Chicago-based firm. In addition, Janus is looking to
bulk up its presence in Asia, starting with markets such as Taiwan
and China.
-By Joseph Checkler, Dow Jones Newswires; 201-938-4297;
Joseph.Checkler@dowjones.com
(Katherine Wegert and Kathy Shwiff contributed to this
article.)
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