The parent of Ivy Funds [see profile]
reveals third quarter results that fell short of analyst expectations. One reason is a shift in the mix of which products are selling, explained Waddell & Reed [see profile]
executives. Still, the Overland Park, Kansas-based firm maintained positive net flows while falling short of earnings expectations [see earnings call transcript
third quarter earnings per diluted share of $0.46, down from $0.58 in Q2 2011 and $0.47 in Q3 2010.
reports that analysts expected the broker-dealer to earn $0.50 per share. MarketWatch
also covered Waddell's earnings.
Even with the down markets, Waddell boasted Q3 2011 net inflows of $1.3 billion compared to $1.7 billion in Q2 2011 and $658 million in Q3 2010.
The company cited both lower A-shares sales and lower 12b-1 fees as "almost equally responsible for the sequential decline in revenues" in the advisors channel. The advisor channel saw $133 million in net outflows.
Those outflows were overwhelmed by strong inflows in other sales channels. The wholesale channel saw $550 million in inflows and the institutional channel added $906 million in net inflows.
"Despite market risk-aversion, Waddell & Reed continued to generate meaningful organic growth," stated Hank Herrmann
, chairman and CEO. "Heightened volatility in the equity markets was an important contributor to weaker flows, offset somewhat by stronger demand for our fixed income products."
Neil Anderson, Managing Editor
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