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AGF Management first-quarter profit drops; shares sink

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AGF Management (TSE:AGF.B), a Canadian mutual fund company, said its profit dropped in the first quarter, but forecast improvement as investors return to the equity market led by the U.S. economy.

Net income from continuing operations dropped 9.8 percent to C$15.6 million in the quarter that ended February 28, from C$17.3 million in the year-earlier period, the Toronto-based company said in a statement on Wednesday. 

On an earnings per share basis, the company reported a 5.8 percent decrease to 17 Canadian cents per diluted share, but it surpassed an average estimate of 14 Canadian cents forecast by nine analysts.

Total assets under management (AUM) decreased 18 percent to C$39.3 billion.

Driven by lower AUM levels, revenue from continuing operations retreated 7.2 percent to C$122.5 million for the December-February period, compared to C$132 million in the year-earlier period.

The shares dipped as much as 9.4 percent to C$10.66, the lowest level in almost two months, before trimming losses to C$10.85 at 10:36 a.m. in Toronto on Wednesday morning.

The company said it is seeing positive signs of a rotation back into equity investing during the first months of this year. 

"The U.S. is leading the way out of the financial crisis and there is a sense of optimism for advisors, investors and across industry stakeholders," the statement quoted CEO Blake C. Goldring as saying. "We believe we are well positioned to benefit from a return of investor confidence and strength of the equity market over the long-term."

AGF will pay a dividend of 27 Canadian cents per class B non-voting share and class A voting common share, the company said in a separate statement on Wednesday.

 

Quick facts: AGF Management

Price: 5.2 CAD

TSX:AGF.B
Market: TSX
Market Cap: $404.99 m
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