Investment services manager Janus Capital Group Inc. (JNS) late Tuesday reported a small second quarter profit, unveiled plans for a share and note offering, and said that its CEO has resigned.
Q2 Earnings Summary
The Denver-based company reported second quarter earnings from continuing operations of $15.8 million, or 10 cents a share, compared with a net loss from continuing operations of $818.1 million, or $5.22 a share, in the previous quarter. In the year-ago period, the company saw earnings from continuing operations of $65.6 million, or 40 cents a share.
Janus said that its operating profit margin in the latest quarter fell to 23.5%, compared to 34.5% in the same period last year.
CEO Resigns
Janus' CEO, Gary Black, resigned from the company on Monday, and will be replaced by Janus Capital director Tim Armour. Armour will assume the position on an interim basis, and will lead the search to find a permanent CEO.
As a result, Janus will pay Black $12.1 million in severance and other payments, which will be recorded in the company's third quarter results.
Stock and Note Offering
Janus also announced that it is offering $150 million of new common stock, as well as $150 million in convertible senior notes due in 2014. Janus will retain the right to decide whether the notes are converted to cash, common stock shares, or a combination of the two.
The company said it will use the funds, along with other cash, to buy back up to $400 million of the company's outstanding 2011, 2012, and 2017 senior notes.
Janus shares fell 44 cents, or -3.9%, in morning trading Wednesday.
The Bottom Line
We have avoided shares of JNS since our early June coverage began, when the stock was trading at $29.12. The company has a .36% dividend yield, based on last night's closing stock price of $11.17. The stock has technical support in the $8 price area. If the shares can firm up, we see overhead resistance around the $12-13 price levels. We would remain on the sidelines for now.
Janus Capital Group Inc. (JNS) is not recommended at this time, holding a Dividend.com DARS Rating of 2.9 out of 5 stars.
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