Waddell & Reed reports higher profit, but sales remain weak

Waddell & Reed Financial Inc. on Tuesday reported an increase in third-quarter profits, but the mutual fund and investment advisory firm said sales remain weak.

The Overland Park-based firm said third-quarter net income of $53.8 million was higher than last year’s third-quarter profit of $48.1 million. Waddell & Reed said the profit amounted to 65 cents per share, which beat Wall Street expectations measured by Zacks Investment Research.

The investment firm said this year’s third quarter included a gain of $8.5 million from changes in its post-retirement medical benefit plan.

Waddell & Reed posted revenue of $303.1 million in the period, also beating Wall Street forecasts. However, revenue in the third quarter last year reached $376.1 million.

“Despite improvement in investment performance year-to-date, sales volume remains weak,” the company said in the earnings release.

Assets under management stood at about $85 billion at the end of the third quarter, down less than 2 percent from the second quarter.

Waddell & Reed has been eliminating jobs and cutting other costs in recent months, and the company said the impact of those moves has become more visible. “The (third) quarter included the full benefit of our recent workforce reductions, and we continue to carefully manage costs,” the company said.

This story was originally published October 25, 2016 at 11:06 AM with the headline "Waddell & Reed reports higher profit, but sales remain weak."