By Owen Tucker-Smith

Franklin Resources posted a drop in fiscal first-quarter profit that still came in ahead of Wall Street estimates, as higher expenses offset an uptick in revenue.

The financial-services holding company Friday reported net income of $163.6 million, or 29 cents a share, down from $251.3 million, or 50 cents a share, a year before.

On an adjusted basis, the company posted earnings of 59 cents a share, compared with 65 cents a share. Analysts were expecting 53 cents a share.

The San Mateo, Calif., company, which specializes in mutual funds and ETFs, posted adjusted operating revenue of $1.68 billion, compared with $1.53 billion a year earlier and in line with analyst expectations.

The revenue increase included a 95% increase in shareholder servicing fees and a 27% increase in sales and distribution fees.

Operating expenses rose 14% to $2.03 billion, which included a 31% increase in amortization of intangible assets and a 40% jump in general, administrative and other costs.

Chief Executive Jenny Johnson said 2024 presented significant challenges for Western Asset Management, a subsidiary of the company.

"In the near term, we will integrate select corporate functions, creating efficiencies and giving access to broader resources, while ensuring Western's investment team autonomy," Johnson said.

Shares of Franklin Resources rose 2.5% to $20.65 in premarket trading.

Write to Owen Tucker-Smith at owen.tucker-smith@wsj.com

(END) Dow Jones Newswires

January 31, 2025 09:03 ET (14:03 GMT)

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