So Far Q2 Reports Cards are Better Than Expected
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Thursday, July 27, 2006

So Far Q2 Reports Cards are Better Than Expected

Some companies are blaming the market for earnings disappointments, but most have managed to top the Street's expectations.

Affiliated Managers Group Inc. beat analysts' expectations by a penny and 2005's second quarter by 17 cents, returning $1.30 per share for the second quarter of 2006(Thomson/First Call expected $1.29, and AMG returned $1.13 in Q2 2005)). Net client cash flows were roughly $2.9 billion, including $289 million in mutual funds. AMG's assets under management hit $202 billion on June 30, up $64 billion from last year.

In a release issued Wednesday, AMG president and CEO Sean M. Healey credited strong "organic growth" and "effective capital management", noting a recent repurchase by the fund firm of common stock.

Asset manager SEI Investments Company also beat expectations earning $0.57 per share (as compared with expectations of $0.50 and last year's $0.43). However, assets under management dropped, from $28.34 million last June to $26.35 million this June.

SEI chairman and CEO Alfred P. West, Jr. insisted that the company investment's are "on schedule," in a release issued Thursday.

Calamos Asset Management Inc., however, missed expectations by two cents, despite increasing four cents over last year (Calamos returned $0.34 this quarter, but Thomson/First Call expected $0.36, and Calamos returned $0.30 a year ago). Assets under management increased 16 percent over last year, to $45.8 billion.

In a release issued Tuesday, Calamos chairman and CEO John P. Calamos, Sr. blamed "market volatility" and "the stock market's nervous saw-tooth pattern" for the lower-than-expected earnings.

Global asset manager Legg Mason Inc. also missed expectations, returning five cents less than predicted. Legg Mason returned $1.08, up from $0.74 last year, but below the $1.13 expected by analysts with Thomson/First Call. Assets under management fell from 1.5 percent from March, from $868 billion to $855 billion.

The company, in a release issued Tuesday, noted $7 billion in client cash outflows as the principal cause of the decline in AUM. Like Calamos, Legg Mason chairman and CEO Raymond A. Mason cited "challenging market conditions" as the cause for the disappointments.

Back office specialist DST Systems Inc. also failed to meet expectations, despite increasing from $0.65 last year to $0.70 (compared with expectations of $0.75). DST processed 104.1 million U.S. Mutual fund open shareowner accounts by the end of June, up 3.9 million over last year.

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