Franklin Resources Inc

Franklin Resources delivered a disappointing fiscal second quarter, missing on both the top and bottom lines as persistent outflows from Western Asset Management continued to weigh on the firm's results. Adjusted EPS came in at $0.47, falling short of the $0.48 consensus estimate by 2.79%, while revenue slid 1.9% year-over-year to $2.11 billion, a 13.50% shortfall against analyst expectations of $2.44 billion. The single most consequential drag was a $41.40 million loss on a seed investment in a since-closed renewable energy fund, which shaved $0.06 per diluted share from the adjusted figure. Western Asset remained the dominant headwind, generating $33.60 billion of the firm's $26.20 billion in long-term net outflows and pulling total AUM down 2% to $1.54 trillion. CEO Jenny Johnson highlighted that excluding Western Asset, the rest of the firm attracted $7.40 billion in net inflows, with alternatives fundraising reaching $6.80 billion and the institutional pipeline of won-but-unfunded mandates climbing to $20.40 billion, its strongest level since 2022.