AGF profit drops in first quarter, but outlook bright
TORONTO (Reuters) - Canadian fund manager AGF Management Ltd (AGFb.TO: Quote) said on Wednesday its profit dipped in the first quarter compared with a year earlier, but improvement is expected as investors return to equities and the U.S. economy climbs out of the doldrums.
Net income from continuing operations fell 9.8 percent to C$15.6 million ($15.3 million) in the first quarter that ended February 28, from C$17.3 million a year earlier. Assets under management slumped 17.9 percent to C$39.3 billion in the quarter.
But earnings per share were higher than expected at 17 Canadian cents. Analysts' average forecast was 14 Canadian cents a share, according to Thomson Reuters I/B/E/S.
AGF Chief Executive Blake Goldring said he expects a swing back into equity investing will boost his company, an equity specialist.
"The U.S. is leading the way out of the financial crisis and there is a sense of optimism for advisors, investors and across industry stakeholders," Goldring said in a statement.
"Given AGF's competitive strength and focus on global equity investing, we believe we are well positioned to benefit from a return of investor confidence and strength of the equity market over the long-term."
The company said it received a letter during the quarter from Canadian tax authorities, the Canada Revenue Agency, relating to the transfer pricing and allocation of income between a Canadian and foreign subsidiary within AGF.
"The CRA may proceed to issue related notices of reassessments for tax years 2005, 2006 and 2007. The Company strongly disagrees with the CRA's position and will rebut any formal assessment if an assessment is issued to the Company," AGF said in a statement. ($1 = 1.02 Canadian dollars)
(Reporting by Andrea Hopkins; Editing by Maureen Bavdek)
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