Janus profit drops 32 pct in 2Q profit on charges

Janus Capital 2nd-qtr net income falls 32 pct on debt costs; shares fall as results disappoint

Associated Press

DENVER (AP) -- Shares of Janus Capital Group Inc. fell Thursday after the mutual-fund manager posted a 32 percent decline in second-quarter profit, mainly because of charges related to a swap of long-term debt to reduce interest rates.

Janus reported net income of $15.8 million, or 8 cents per share, for the three months ended June 30. That was down from net income of $23.4 million, or 13 cents per share, in the 2012 second quarter.

The recent quarter's results included charges totaling 6 cents per share. Of that, 4 cents per share related to a swap at the end of the quarter of notes due in 2018 for notes due in 2014 that carried a much higher interest rate, and 2 cents related to the mark-to-market impact on the company's seed capital program.

Without those charges, adjusted profit came to 14 cents per share.

Revenue rose 5 percent to $215.8 million, from $206 million last year.

Analysts, on average, expected profit of 15 cents per share, on revenue of $217.8 million, according to FactSet.

The shortfall on both metrics helped push shares down. Shares of Janus lost 33 cents, or 3.4 percent, to $9.38 in midday trading.

Total assets under management at June 30 were $160.6 billion, down from $163.8 billion at March 31, but up from $152.4 billion a year ago. Janus said its clients pulled $5.4 billion from long-term funds, although $2.2 billion of market appreciation due to the market rally helped reduce the impact of the outflows.

Jefferies analyst Daniel Fannon pointed to the outflows as a key concern. "Lagging relative investment performance remains the primary headwind to fund flow and performance fee improvement," Fannon wrote in a note to clients.

Janus also named Jennifer McPeek as its new chief financial officer, replacing Bruce Koepfgen, who will be promoted to the newly established role of president.

McPeek, 43, currently senior vice president and treasurer, has been with the firm since 2009. She was previously senior vice president of strategic planning at ING Investment Management-Americas Region.

Both promotions will take effect Aug. 1.

Janus Capital shares have traded between $6.72 and $10.18 in the past 52 weeks, and started the day up about 13 percent since the beginning of the year.

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