UPDATE 3-Franklin Resources profit jumps, stock falls

* EPS 1.54, Street View $1.41

* Funds take in $14.3 billion

* Flows to stock funds turn negative

* Shares fall 3 percent

(Adds details about stock price, analyst comment)

BOSTON, Jan 28 (BestGrowthStock) – Franklin Resources Inc (BEN.N: ),
one of the biggest publicly traded U.S. mutual fund companies,
said on Thursday that its quarterly profit nearly tripled as
demand for its portfolios surged.

But the company’s stock price fell 3 percent as rival
managers T Rowe Price Group Inc’s (TROW.O: ) and Eaton Vance’s
(EV.N: ) stocks dropped even more.

The company, which manages the popular Franklin Income Fund
and Templeton Global Bond Fund, said net income jumped to
$355.6 million, or $1.54 a share, for its first fiscal quarter
ended Dec. 31. That compares with $120.9 million, or 52 cents a
share, a year ago.

Analysts on average had forecast earnings of $1.41 per
share, according to Thomson Reuters I/B/E/S.

Assets under management climbed to $553.5 billion from
$416.2 billion a year earlier.

Thanks to a 34 percent jump in investment management fees,
Franklin’s operating revenue rose 42 percent to $1.38 billion.

The San Mateo, California-based company has been successful
in attracting new assets in recent months as still skittish
investors preferred safer fixed income funds to stock funds.

Overall, investors added $14.3 billion in new money to
Franklin’s funds during the quarter, marking a 17 percent jump
from flows in the previous quarter and a dramatic recovery from
a year ago when they pulled out $18.2 billion.

The bulk of money again went into Franklin’s bond
portfolios which took in $15.6 billion during the quarter, up
from $11.6 billion in the previous quarter.

Franklin’s hybrid funds took in $1.7 billion.

But investors soured on stock portfolios despite the
market’s rally, and took $2.2 billion out during the quarter.
During the previous quarter, they added $300 million.

They also removed $800 million from Franklin’s cash
management portfolios.

Analysts said redemptions from the stock funds contributed
to Franklin’s 2.75 percent stock drop on Thursday. Shares fell
$2.83 to trade at $101.05.

But the outflow from equities was driven by a few
institutional clients and should not present a long-term
problem for the company, said Sandler O’Neill and Partners
analyst Michael Kim.

“We expect Franklin Resources to increasingly gain market
share even should investors start to gravitate toward equity
strategies reflecting the firm’s scale, diversification,
distribution and investment performance edges,” Kim said.
(Reporting by Svea Herbst-Bayliss, editing by Gerald E.

Stock Trading
McCormick and Robert MacMillan)

UPDATE 3-Franklin Resources profit jumps, stock falls