Janus Capital Group Inc. reported $62.8 million in fourth-quarter costs related to mutual fund investigations Wednesday, putting a slight crimp in earnings for the period that surged on a one-timegain.
The Denver-based company reported net income of $812.9 million, or $3.52 per share, for the quarter ended Dec. 31, boosted by an $807.7 million exchange transaction with DST Systems Inc. A year earlier, Janus earned $45 million, or 20 cents per share.
Besides the gain from the DST deal and the investigation costs, the results included a $9.3 million writedown of assets and a $1.7 million gain from discontinued operations.
Excluding one-time items, net income was $54.5 million, or 23 cents per share. That beat the consensus estimate of analysts surveyed by Thomson First Call by a penny.
Janus also said the $62.8 million charge brought its 2003 bill related to investigations to $71.8 million
The company came under public scrutiny last September, when New York Attorney General Eliot Spitzer announced a settlement with the Canary Capital hedge fund. Spitzer said Canary had improper trading agreements with Janus and three other fund groups. Janus has said it is in settlement talks with regulators.
The $62.8 million charge includes $25.5 million in payments to affected shareholders.
Janus also said its general counsel, Tom Early, plans to retire but would stay on until at least mid-May. Janus expected a charge of $7.6 million, or 2 cents per share, in the first quarter due to the early exercise of contract rights related to his retirement.
For all of 2003, Janus reported net income of $949.9 million, or $4.14 per share. Those results included charges for the mutual fund investigation, the gain from the DST transaction, restructuring costs and intangible asset writedowns of $11.9 million and a loss of $5.9 million from discontinued operations.
Excluding those items, 2003 earnings came to $206.6 million, or 91 cents per share.
Analysts surveyed by Thomson First Call had forecast profits of 84 cents per share.
Janus reported an $84.7 million profit, or 38 cents per share, in 2002. Excluding items including a charge of $59.4 million relating to restructuring, a deferred income tax charge relating to DST shares of $107.8 million, and a loss of $9.8 million from discontinued operations, it reported profits of $239.4 million, or $1.08 per share, for 2002.
“We’re encouraged that our assets and revenues stabilized during the last half of 2003 as market conditions and fund performance improved,” CEO Mark Whiston said.
Janus shares fell 86 cents, or 5 percent, to close at $16.11 Wednesday on the New York Stock Exchange.
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