Franklin Gears Up to Report Q3 Earnings: What's in Store?

Franklin Resources Inc. BEN is scheduled to report third-quarter fiscal 2025 results (ended June 30) on August 1, before market open. BEN’s quarterly earnings and revenues are anticipated to have declined from the year-ago reported levels.

In the last reported quarter, Franklin’s earnings met the Zacks Consensus Estimate. Results were affected by lower revenues and assets under management (AUM). Yet, lower expenses supported the results to some extent.

BEN’s earnings beat the consensus estimate in two of the trailing four quarters, missed once and matched on one occasion, the average earnings surprise being 3.73%.

Franklin Resources, Inc. Price and EPS Surprise

Franklin Resources, Inc. price-eps-surprise | Franklin Resources, Inc. Quote

Franklin’s Q3 Earnings & Sales Estimates

The Zacks Consensus Estimate for BEN’s earnings of 48 cents has been revised upward over the past seven days. The figure indicates a decline of 20% from the year-ago quarter’s actual.

The consensus estimate for sales is pegged at $1.99 billion, suggesting a year-over-year decline of 6.2%.

Key Factors & Estimates for BEN in Q3

In the April-June quarter, markets bounced back with the S&P rising nearly 11%. The fixed-income markets saw positive flow trends, with solid returns across funds. Also, equity markets performance improved during the quarter. As a result, asset managers’ performances for the June-end quarter are likely to have benefited.

Per the monthly metrics data published by Franklin, its preliminary total AUM as of June 30, 2025, was $1.61 trillion compared with the $1.57 trillion reported as of May 31, 2025. The June-end AUM reflected the positive impacts of markets, partially offset by long-term net outflows of $1 billion. The Zacks Consensus Estimate for the fiscal third-quarter AUM is pegged at $1.54 trillion, indicating a marginal rise from the prior quarter’s actual. Our estimate for the metric is pegged at $1.55 trillion.

The Zacks Consensus Estimate for investment management fee is pegged at $1.54 billion, indicating a sequential decline of 7.8%. Our estimate for the metric is the same as the consensus estimate.

The consensus estimate for sales and distribution fees of $339.7 million indicates a 6.9% fall from the prior quarter’s reported figure. We estimate the metric to be $327 million.

The consensus estimate for shareholder servicing fees of $57.9 million suggests a 6.3% decline from the prior quarter’s actual.

The Zacks Consensus Estimate for other revenues is pegged at $11.4 million, calling for a sequential rise of 3.7%. Our estimate for shareholder servicing fees and other revenues is pegged at $56.7 million and $10.5 million, respectively.

What Our Model Predicts for BEN

Per our proven model, the chances of BEN beating estimates this time are low. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. That is not the case here, as you can see below.

You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter.

Earnings ESP: Franklin has an Earnings ESP of -0.05%.

Zacks Rank: BEN currently has a Zacks Rank of 3. You can see the complete list of today’s Zacks #1 Rank stocks here.

Performance of BEN’s Peers

Invesco’s IVZ second-quarter 2025 adjusted earnings of 36 cents per share lagged the Zacks Consensus Estimate of 40 cents. Moreover, the bottom line declined 16.3% from the prior-year quarter.

IVZ’s results were adversely impacted by higher adjusted operating expenses. However, a rise in adjusted net revenues was a tailwind. An increase in the AUM balance due to solid inflows was positive, too. 

SEI Investments Co.’s SEIC second-quarter 2025 earnings per share of $1.78 beat the Zacks Consensus Estimate of $1.18. Moreover, the bottom line reflected a rise of 70% from the prior-year quarter.

SEIC’s results were aided by higher revenues and a rise in AUM. However, higher expenses acted as a spoilsport.

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This article originally published on Zacks Investment Research (zacks.com).

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