Franklin Q1 Earnings & Revenues Surpass Estimates, AUM Declines Q/Q

Core Viewpoint - Franklin Resources Inc. reported first-quarter fiscal 2025 adjusted earnings of 59 cents per share, exceeding the Zacks Consensus Estimate of 53 cents, but down from 65 cents in the prior year [1][2] Financial Performance - Total operating revenues increased by 13% year over year to $2.25 billion, surpassing the Zacks Consensus Estimate of$2.1 billion, driven by higher investment management fees, sales and distribution fees, and shareholder servicing fees [3][4] - Investment management fees rose by 9% year over year to $1.79 billion, while sales and distribution fees increased by 27$376 million, and shareholder servicing fees jumped by 95% to $64 million [4] - Total operating expenses rose by 14$2.03 billion, exceeding the estimate of $1.96 billion, resulting in an operating margin of 9.7$1.58 trillion, a decline of 6% sequentially, with long-term net outflows of $50 billion during the quarter [6] - The average AUM decreased by 2$1.63 trillion [6] Capital Position and Distribution - As of December 31, 2024, cash and cash equivalents, and investments totaled $5.2 billion, while total stockholders' equity was$13.2 billion [7] - In the reported quarter, the company repurchased 0.3 million shares for $5.8 million [8] Strategic Outlook - The company's efforts to diversify its business through acquisitions and a strong distribution platform are expected to support revenue growth, although rising expenses from technological upgrades may hinder bottom-line growth [9]