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Waddell & Reed Financial, Inc. Reports First Quarter Results
Overland Park, KS, Apr. 30, 2019 Waddell & Reed Financial, Inc. (NYSE: WDR) today reported first quarter 2019 net income1 of $32.1 million, or $0.42 per diluted share, compared to net income of $46.5 million, or $0.60 per diluted share, during the prior quarter and net income of $46.3 million, or $0.56 per diluted share, during the first quarter of 2018.
Revenues of $259.4 million during the quarter decreased $12.8 million and $38.2 million compared to the fourth and first quarters of 2018, respectively. Operating expenses of $223.9 million declined $3.9 million compared to the prior quarter and declined $13.8 million compared to the same quarter in 2018. The operating margin was 13.7% during the current quarter, compared to 16.3% and 20.1% during the fourth and first quarters of 2018, respectively.
Assets under management ended the quarter at $71.7 billion, a 9% increase compared to the prior quarter and a decrease of 11% compared to the first quarter of 2018. Net outflows of $1.8 billion during the current quarter improved compared to net outflows of $3.8 billion in the fourth quarter of 2018 and were higher than the first quarter of 2018. Sales of $2.5 billion during the current quarter declined 8% and 34% compared to the prior quarter and the first quarter of 2018, respectively. Sales for the quarter were challenged, in part by carryover effects from volatility experienced in the fourth quarter of 2018 and investors preference for short duration fixed income products over equity products. Redemption rates improved 12% compared to the prior quarter as redemptions in our unaffiliated channel improved meaningfully. Redemption rates were relatively comparable with the first quarter of 2018, improving 1%.
Wealth management assets under administration ended the quarter at $56.1 billion, a 9% increase compared to the fourth quarter of 2018, due to market appreciation. Compared to the same quarter in 2018, assets under administration decreased slightly as outflows from non-advisory assets were only partially offset by net new advisory assets and market appreciation. Average productivity per associated independent financial advisor (Advisor), measured as average trailing twelve-month revenue per Advisor, was $400 thousand for the current quarter, rising 6% compared to the prior quarter and 40% compared to the same quarter in the prior year.
Despite a challenging market environment as we began 2019, our team remained focused on executing our plans through improved investment performance, ongoing product development and the continued evolution of our wealth management platform. We made progress in each of these areas during the quarter, as we continued to improve short- and intermediate-term investment performance rankings across the complex, introduced a new investment vehicle for our existing strategies and made further progress on our commitment to improved technology and practice development for our Advisors, said Philip J. Sanders, Chief Executive Officer of Waddell & Reed Financial, Inc.
Mr. Sanders continued, While we were encouraged by the rebound in markets after the volatile end to last year, the sales environment is challenging. Nevertheless, we remain steadfast in our commitment towards improving our Companys long-term competitive positioning.
Investment management fees declined $4.8 million, or 4%, compared to the fourth quarter of 2018, primarily due to two fewer days in the quarter and lower average assets under management. The effective management fee rate of 63.5 basis points was consistent with the prior quarter. Compared to the first quarter of 2018, investment management fees declined
The following information was filed by Waddell Reed Financial Inc (WDR) on Tuesday, April 30, 2019 as an 8K 2.02 statement, which is an earnings press release pertaining to results of operations and financial condition. It may be helpful to assess the quality of management by comparing the information in the press release to the information in the accompanying 10-Q Quarterly Report statement of earnings and operation as management may choose to highlight particular information in the press release.
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