ended its fiscal third quarter with a net loss of $1.5 billion, or $10.55 a share, versus net income of $154.6 million, or $1.07 a share, in the year-ago period. The loss -- its fourth straight -- was partly due to costs associated with efforts to reduce the structured investment vehicle exposure of its money market funds. The Baltimore fund firm also recorded impairment charges of $1.2 billion in its wealth management division, and a charge of $36.1 million to reflect the anticipated lost sublease income from an unnamed "major investment bank which had declared bankruptcy."
Not counting intangible-asset impairment charges, the loss was $4.52 a share. Analysts had expected a loss of $4.01, according to
AUM totaled $698.2 billon, a decrease of 17 percent from $841.9 billion at end-September and a decrease of 30 percent from $998.5 billion at the end of
The company, which currently offers 142 mutual funds, is embarking on a revamp of its mutual fund lineup (see The MFWire,
01/26/09). Company officials will examine whether to merge or liquidate some funds.
Meanwhile, Legg Mason CEO Mark Fetting
said the firm is ahead of schedule in achieving its target of $120 million in costs reductions.
"We have taken actions to aggressively cut operating costs to reflect the realities of lower revenue and profit levels," said Fetting, who took the top job at Legg a year ago. "Through the end of December, we have achieved run-rate savings of over $100 million and we expect to realize sustainable savings of $135 million by March 31, 2009."
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