Why Is Franklin Resources (BEN) Up 6.9% Since Last Earnings Report?

Company Overview - Franklin Resources reported fourth-quarter fiscal 2024 adjusted earnings of 59 cents per share, missing the Zacks Consensus Estimate of 60 cents, and reflecting a 29.7% decrease from the prior-year quarter [2] - The company experienced a net loss of $84.7 million compared to a net income of $295.5 million in the prior-year quarter [3] - For fiscal 2024, adjusted earnings per share were $2.39, down from $2.60 in the prior year [4] Revenue and Expenses - Total operating revenues for fiscal 2024 increased by 8% year over year to $8.48 billion, surpassing the Zacks Consensus Estimate of $8.39 billion [5] - In the fiscal fourth quarter, total operating revenues rose 11.3% year over year to $2.21 billion, driven by increases in investment management fees, sales and distribution fees, and shareholder servicing fees, also exceeding the Zacks Consensus Estimate of $2.12 billion [5] - Investment management fees increased by 8.1% year over year to $1.77 billion, while sales and distribution fees rose by 20.1% to $368 million, and shareholder servicing fees surged by 80.1% to $67 million [6] - Total operating expenses rose by 43.3% year over year to $2.36 billion, attributed to increases across all components of operating expenses [6] - The operating margin was reported at negative 6.8%, a significant decline from the 17% margin in the year-ago quarter [7] Assets Under Management (AUM) - As of September 30, 2024, total AUM was $1.69 trillion, reflecting a sequential increase of 1.9% [8] - Average AUM increased by 2.1% sequentially to $1.67 trillion [10] - The company reported long-term net outflows of $31.3 billion during the reported quarter [9] Capital Position - As of September 30, 2024, cash and cash equivalents, along with investments, totaled $5.6 billion, while total stockholders' equity was $13.3 billion [11] - In the reported quarter, Franklin repurchased 4.9 million shares for $102.4 million [12] Market Performance and Outlook - The consensus estimate for Franklin Resources has trended downward, with a shift of -10.57% noted [13][14] - The company currently holds a Zacks Rank 4 (Sell), indicating expectations of below-average returns in the coming months [15] - Franklin Resources is part of the Zacks Financial - Investment Management industry, which has seen competitors like Principal Financial report a revenue increase of 5.6% year over year [16]