On July 26, 2024, Franklin Resources Inc (BEN, Financial) released its 8-K filing for the third quarter ended June 30, 2024. The company reported net income of $174.0 million or $0.32 per diluted share, falling short of the analyst estimate of $0.37 per share. Operating revenues for the quarter were $2,122.9 million, surpassing the estimated $1,663.54 million.
Franklin Resources provides investment services for individual and institutional investors. As of April 2024, the company managed $1.602 trillion in assets, with a diverse portfolio including equity, fixed-income, multi-asset/balanced funds, alternatives, and money market funds. The distribution is balanced between retail investors and institutional accounts, with a significant portion of assets sourced from clients outside the United States.
Financial Performance and Challenges
Franklin Resources Inc (BEN, Financial) reported a net income of $174.0 million or $0.32 per diluted share for Q3 2024, compared to $124.2 million or $0.23 per diluted share in the previous quarter, and $227.5 million or $0.44 per diluted share in Q3 2023. The company’s operating income was $222.5 million, up from $129.3 million in the previous quarter but down from $314.9 million in the same quarter last year.
Despite the increase in operating income from the previous quarter, the year-over-year decline highlights ongoing challenges. The company’s operating margin also decreased to 10.5% from 16.0% in Q3 2023, indicating pressure on profitability.
Key Financial Achievements
Franklin Resources Inc (BEN, Financial) achieved several financial milestones in Q3 2024. Adjusted net income was $326.4 million, with adjusted diluted earnings per share at $0.60, compared to $306.6 million and $0.56 in the previous quarter. The company’s adjusted operating income was $424.9 million, reflecting a slight increase from $419.6 million in Q2 2024.
“During our third fiscal quarter, we saw a number of positive developments across our business which further diversified our firm’s capabilities, and continued our focus on new technologies to optimize the client experience and support our business growth,” said Jenny Johnson, President and CEO of Franklin Resources Inc.
Income Statement Highlights
| Metric | Q3 2024 | Q2 2024 | Q3 2023 |
|---|---|---|---|
| Operating Revenues | $2,122.9 million | $2,152.8 million | $1,969.0 million |
| Operating Income | $222.5 million | $129.3 million | $314.9 million |
| Net Income | $174.0 million | $124.2 million | $227.5 million |
| Diluted EPS | $0.32 | $0.23 | $0.44 |
Balance Sheet and Cash Flow
As of June 30, 2024, Franklin Resources Inc (BEN, Financial) reported total assets under management (AUM) of $1,646.6 billion, a slight increase from $1,644.7 billion in the previous quarter. The company’s cash and cash equivalents and investments stood at $5.6 billion, with total stockholders’ equity at $13.6 billion. The company repurchased 4.3 million shares of its common stock for a total cost of $101.5 million during the quarter.
Analysis and Outlook
Franklin Resources Inc (BEN, Financial) continues to navigate a challenging environment with mixed results. While the company has made strides in diversifying its offerings and investing in new technologies, the decline in year-over-year net income and operating margin indicates ongoing pressures. The company’s focus on long-term strategic initiatives, including partnerships and technological advancements, may provide a foundation for future growth.
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Explore the complete 8-K earnings release (here) from Franklin Resources Inc for further details.
