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Franklin Resources Third Quarter Earnings Preview
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BEN
Franklin Resources (NYSE:BEN) will release its third quarter earnings on Monday, July 30, 2012. Analysts have become increasingly bearish on the company over the last month, with the consensus analyst estimate slipping from $2.10 a share to the current prediction of earnings of $2.06 a share.
Earnings play an important role in measuring the appropriate valuation for a stock. Investors should be cautious if the company's stock price is high but it consistently has low earnings. SEE: Can Earnings Guidance Accurately Predict The Future?
What to Expect: The consensus estimate is down from three months ago when it was $2.25. For the fiscal year, analysts are expecting earnings of $8.79 per share.
Franklin is expected to report revenue of $1.8 billion for the quarter, down by 3.9% from last year's figure of $1.87 billion. Revenue for the fiscal year is expected to come in at $7.13 billion.
Company Performance: In the past four quarters, revenue has shown consistent growth. It rose 4.1% in the second quarter, 1.5% in the first quarter, 2.8% in the fourth quarter of the last fiscal year and 23.9% in the third quarter of the last fiscal year.
The company has been profitable for the last eight quarters; profit has risen year-over-year by an average of 11.8% over the most recent four quarters.
BEN's P/E ratio of 12.4 is under the industry average of 16.14. A low P/E might arise due to substantial inherent risk of the firm and its operations, poor return on equity, or improper valuation of the market. Price/earnings ratios (P/E ratios) provide a measure of the relative value of a stock. A high or low P/E ratio is not good or bad in and of itself, but a company trading with a high P/E ratio must continue to post strong financial performance or its stock price is likely to fall. SEE: Profit With The Power Of Price-To-Earnings
Since April 26, 2012, the stock price has fallen 14.5% to $107.37 from $125.63. Franklin's worst recent stretch was when its stock price fell $7 per share between May 14, 2012 and May 31, 2012.
The Competition: Franklin Resources is a global investment manager that offers investment vehicles for clients, including individuals, institutions, and trusts. They are slightly more optimistic about the stock recently, as the number of buy ratings has risen slightly over the past three months.
The company's closest competitor in the investment services industry is BlackRock (BLK). Analysts are less optimistic about Franklin than about BlackRock. Nine out of 15 analysts rate the latter a buy compared to eight of 17 for the former.
Earnings play an important role in measuring the appropriate valuation for a stock. Investors should be cautious if the company's stock price is high but it consistently has low earnings. SEE: Can Earnings Guidance Accurately Predict The Future?
What to Expect: The consensus estimate is down from three months ago when it was $2.25. For the fiscal year, analysts are expecting earnings of $8.79 per share.
Franklin is expected to report revenue of $1.8 billion for the quarter, down by 3.9% from last year's figure of $1.87 billion. Revenue for the fiscal year is expected to come in at $7.13 billion.
Company Performance: In the past four quarters, revenue has shown consistent growth. It rose 4.1% in the second quarter, 1.5% in the first quarter, 2.8% in the fourth quarter of the last fiscal year and 23.9% in the third quarter of the last fiscal year.
The company has been profitable for the last eight quarters; profit has risen year-over-year by an average of 11.8% over the most recent four quarters.
Since April 26, 2012, the stock price has fallen 14.5% to $107.37 from $125.63. Franklin's worst recent stretch was when its stock price fell $7 per share between May 14, 2012 and May 31, 2012.
The Competition: Franklin Resources is a global investment manager that offers investment vehicles for clients, including individuals, institutions, and trusts. They are slightly more optimistic about the stock recently, as the number of buy ratings has risen slightly over the past three months.
The company's closest competitor in the investment services industry is BlackRock (BLK). Analysts are less optimistic about Franklin than about BlackRock. Nine out of 15 analysts rate the latter a buy compared to eight of 17 for the former.
by
Investopedia Staff
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