Franklin Q2 Earnings Meet Estimates, Costs & Revenues Fall, Stock Up

Core Viewpoint - Franklin Resources Inc. reported second-quarter fiscal 2025 adjusted earnings of 47 cents per share, matching the Zacks Consensus Estimate but down from 56 cents in the prior year [1][2] Financial Performance - Net income on a GAAP basis was $151.4 million, reflecting a year-over-year increase of 21.9% [2] - Total operating revenues decreased by 1.9% year over year to $2.11 billion, surpassing the Zacks Consensus Estimate of $1.98 billion [3] - Investment management fees fell by 2.4% year over year to $1.67 billion, while sales and distribution fees increased by 1.8% to $364.9 million [4] - Total operating expenses declined by 2.9% year over year to $1.97 billion, with an operating margin of 6.9%, up from 6% in the previous year [5] Assets Under Management (AUM) - As of March 31, 2025, total AUM was $1.54 trillion, down 2.2% sequentially, with long-term net outflows of $26.2 billion during the quarter [6] - The average AUM decreased by 3.9% sequentially to $1.57 trillion [6] Capital Position - As of March 31, 2025, cash and cash equivalents and investments totaled $6.1 billion, while total stockholders' equity was $13.2 billion [7] Capital Distribution - In the reported quarter, the company repurchased 0.5 million shares for $10 million [8] Strategic Outlook - The company is focusing on diversifying its business through acquisitions and enhancing its distribution platform, which may support revenue growth despite rising expenses from technological upgrades [9]