UPDATE 1-Legg Mason quarterly profit up 7 pct despite outflows
Oct 25 (Reuters) - Asset manager Legg Mason Inc on Friday said its quarterly profit rose 7 percent compared with a year ago but reported an outflow of investor cash from its equity funds.
The results show the challenges facing Legg Mason Chief Executive Joseph Sullivan as he tries to turn around the fortunes of one of the largest U.S. fund firms.
For the three months ended Sept. 30 the Baltimore company reported net income of $86.3 million, or 70 cents per share, up from net income of $80.8 million, or 60 cents per share, in the same period in 2012.
Analysts surveyed by Thomson Reuters I/B/E/S had expected Legg Mason to report net income of 61 cents per share for the period, the company's second fiscal quarter.
Legg Mason said assets under management rose to $656 billion at the end of the quarter from $644.5 billion at the end of June, due mainly to a $14.2 billion increase in market performance and foreign exchange.
But total outflows - a measure closely watched by analysts - were $1.4 billion, Legg Mason said, driven by $4 billion in outflows from its equity funds. Bond funds and money market funds took in $300 million and $2.3 billion respectively during the quarter, Legg Mason said.