FUNDWATCH: Eaton Vance Profit Down But Ahead Of Estimates

By Sam Mamudi

NEW YORK (Dow Jones) -- Eaton Vance reported better-than-expected quarterly results on Wednesday, spreading a small amount of hope in an otherwise gloomy asset management sector.

Earnings per share for its fiscal first quarter were 21 cents, ahead of Wall Street estimates, which according to Thomson Reuters called for 19 cents.

Still, profit was down 57%, to $24.7 million from $57.9 million, or 46 cents a share, in the year-ago period. Revenue fell 28%, to $209.5 million, from the fiscal first quarter of 2008.

"Despite the challenging market environment and economy, Eaton Vance continues to grow organically and remains solidly profitable and financially strong," said Thomas Faust, chairman and chief executive officer, in a statement.

Assets under management fell by just over $1 billion, to $121.9 billion from $123.1 billion on Oct. 31. Eaton Vance saw $500 million of net flows into its long-term funds during the quarter, compared to $400 million of net outflows in the previous quarter. Both bond and stock funds saw net inflows in the recent quarter, but bank loan funds saw about $800 billion in net outflows.

In the past year, Eaton Vance's total assets have fallen by 20%, from $152.9 billion on Jan. 31, 2008.

Eaton Vance's results compare favorably to most other publicly-traded asset managers. The industry's fourth-quarter results were some of the worst on record, led by Legg Mason Inc.'s (LM) $1.5 billion loss.

Even a powerhouse such as BlackRock Inc. (BLK) suffered badly, with profit down 84% compared to the previous year. T. Rowe Price Group (TROW) saw its profit fall 87% and Franklin Resources Inc. (BEN) saw a 77% decline.

Fourth-quarter profits at Invesco Ltd. (IVZ) fell 82%, while AllianceBernstein Holding (AB) and Janus Capital Group saw their profits fall by 73% and 60%, respectively.

Those firms were reporting results for the quarter ending Dec. 31.

Eaton Vance's relatively strong performance is reflected in its share price. The firm is among the best asset management stocks, down 45% in the past 12 months. In early trading Wednesday, the stock was up about 5%, trading around $18.

As of early Wednesday, shares of BlackRock were down 46.5% in the past 12 months, while T. Rowe's stock has fallen about 52%. Shares of Franklin are down 50% in the same period.

Shares of Legg Mason and AllianceBernstein are down 80% in the past year, while Janus' stock has declined just over 81%.