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Janus Capital Group Falls 12% in 1 Month despite Strong Earnings

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Misses the estimate

Janus Capital Group (JNS) reported 2015 second-quarter net profits of $45 million, or $0.23 per diluted share, missing the Wall Street analyst estimate by 1 cent. Nevertheless, the company’s revenues of $272 million topped estimates.

The company’s stock price has fallen more than 12% in the last month, in line with the industry-wide trend. Its stock price benefited heavily from the hiring of Bill Gross from PIMCO (Pacific Investment Management Company) in 2014. Net profits are up by 23% when compared with the same quarter last year.

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In a July 23 press release, Janus Capital’s CEO said, “I think the first headline is obviously that we’ve had the third consecutive quarter of positive long-term net flows led by our Janus Fundamental Equities team. The second thing, which I think leaps off the page for this quarter, is of course our acquisition of Kapstream, which is an Australian company that is focused on the unconstrained bond business.”

Janus Capital Group’s AUM (assets under management) stood at $89.5 billion as of June 30, 2015. Last quarter, AUM totaled $189.7 billion, and in the same quarter last year, AUM came in at $177.7 billion.

Mutual fund business

Janus Capital Group provides investment management services to financial advisors, individuals, and institutional clients through mutual funds, other pooled investment vehicles, separate accounts, and subadvisory relationships across the globe. Its product offerings include US and global equities, mathematical equities, fixed income products, and alternatives.

Janus Capital Group’s revenues totaled $953 million last fiscal. The company’s peers posted the following results:

  • BlackRock (BLK) – $11.1 billion
  • T Rowe Price Group (TROW) – $4 billion
  • Bank of New York Mellon (BK) – $3.2 billion

Together, these companies form 3.5% of the Financial Select Sector SPDR Fund (XLF).

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