May 12, 2010 / 3:15 PM / 7 years ago

UPDATE 2-Sprott profit slips, managed assets rose

* Q1 EPS C$0.04, in line

* Q1 revenue falls 5 pct

* Assets under management up 9 pct to C$5.15 bln

(Adds comments from conference call)

TORONTO, May 12 (Reuters) - Fund management firm Sprott Inc (SII.TO) posted lower first-quarter earnings that met analysts’ expectations even as assets under management rose, driven by the two new funds it launched in the quarter.

For the quarter ended March 31, Sprott earned C$5.9 million ($5.78 million), or 4 Canadian cents a share, which compares with C$7.4 million, or 5 Canadian cents per share, a year ago.

Assets under management totaled C$5.15 billion, up from C$4.72 billion a year ago.

Revenue fell 5 percent to C$25.3 million.

Analysts on average were expecting earnings of 4 Canadian cents a share, on revenue of C$25.1 million, according to Thomson Reuters I/B/E/S.

The company launched the Sprott Physical Gold Trust and the Sprott 2010 Flow-Through Limited Partnership in the quarter, which together added C$400 million to its assets.

Sprott Director Peter Hodson said he expected “above average” financial results in the long term, noting the firm was actively pursuing acquisitions on the asset management side that would add to earnings and would broaden offerings.

“We’ve been unsuccessful in closing acquisitions so far, but it is not through lack of trying. So we continue to approach people and have active discussions with lots of people right now,” Hodson told analysts on a conference call.

Expenses for the quarter rose 4.7 percent to C$16.6 million, mainly from higher compensation and benefits.

Shares of Toronto-based Sprott rose 17 Canadian cents to C$4.17 Tuesday on the Toronto Stock Exchange. ($1=1.021 Canadian Dollar) (Reporting by Andrea Hopkins in Toronto and Abhiram Nandakumar in Bangalore; Editing by Unnikrishnan Nair)

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