Legg Mason Inc reported a quarterly loss on Friday on charges for impaired assets and continued outflows from its equity and bond funds, and the asset manager said it should name a permanent CEO soon.
The company's board is "nearing completion" of its search for a new chief executive officer and should name someone to that position "in the not-too-distant future," interim CEO Joseph Sullivan told investors in a conference call.
Legg Mason reported a net loss of $453.9 million, or $3.45 per share, for the third quarter ended on December 31, compared with year-earlier net income of $28.1 million, or 20 cents per share.
As Legg Mason had forecast, the results included pretax charges of $734 million, or $508 million after taxes, to account for writing down the value of assets like fund management contracts and uncertainties such as the ongoing search for a new CEO.
Excluding a tax expense of 7 cents per share, the loss was $3.38 per share, deeper than the $3.23 that analysts on average had expected, according to Thomson Reuters I/B/E/S.
Assets under management fell to $648.9 billion from $650.7 billion at September 30. The decline was due to net client withdrawals of $7.5 billion, which was partly offset by market gains and other income of $5.7 billion.
During the quarter, equity outflows were $8.3 billion, and bond outflows were $6.8 billion, while clients added $7.6 billion to liquidity products like money funds.
Sullivan called the results disappointing but said the company had "made good progress during the quarter on a number of strategic fronts," such as the purchase of London hedge fund firm Fauchier Partners.
In a note to investors, Sandler O'Neill analyst Michael Kim also said the results were disappointing and suggested the risk of further withdrawals remained high across the company's affiliates.
"Uncertainty around the strategic direction of the firm pending the appointment of a new CEO likely remains an overhang for the stock," Kim said.
(Reporting by Ross Kerber; Editing by Jeffrey Benkoe and Lisa Von Ahn)