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Calamos Boosts Earnings on Higher Average Assets

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Calamos Asset Management (CLMS) reported second-quarter 2010 results, including revenues of $80.5 million. This represents a 22% increase over last year, which was largely driven by an increase in average assets under management, according to the company.

The Naperville, Ill.-based company had net income of $4.7 million during the period. Its earnings per share of $0.23 topped last year’s $0.09.

Analysts had estimated that the company would have EPS of $0.15 on $77.76 million of sales.

Calamos also had operating income of $29.7 million and income before income taxes of $34.3 million.

(EPS and net-income figures account for the public ownership portion of about 22% of the investment-management business; the remaining ownership portion of roughly 78% is attributed to the Calamos principals, the company says.

On June 30, 2010, Calamos had assets under management of $29.9 billion, a decrease of $3.0 billion, or 9%, from the previous quarter and a drop of 9% year over year.

The company said its second-quarter AUM were affected by $2.3 billion in market depreciation and net redemptions of $0.7 billion since the first quarter. Year over year, the asset decline was comprised of $1.5 billion in market depreciation and net redemptions of $1.3 billion.

Average assets under management were $32.0 billion for the first half of 2010, though, compared to $24.5 billion for the same period one year ago.

“Calamos Asset Management demonstrated the strength of its core investment competencies in a very challenging economic quarter,” said Chairman and CEO John P. Calamos, Sr. in a press release. “There were declines in the overall equity market this quarter, but our relative investment performance was encouraging. Also, our firm’s financial condition remains strong.”

According to the company, the firm had had positive flows in its institutional business during the second quarter, “with new client funding in excess of $250 million for the quarter.”

“We continue to see strong interest and flows into our alternative and lower-volatility equity strategies, which are core competencies for us,” said Calamos in a statement.

“Domestic equity flows were challenging for the quarter industry-wide and we saw net outflows in our domestic equity strategies,” he explained.

The company says that net outflows from its SMA accounts were generally in line with its expectations, given its decision in the first quarter of 2010 to increase the account minimums for its convertible-based strategies on SMA platforms. “We believe the final account closures resulting from this decision were completed during the second quarter of 2010,” the firm explained in a press release.

Second quarter revenues were $80.5 million, an increase of 20% from $67.1 million in the second quarter of 2009, principally driven by a 22% increase in average assets under management.

Revenues for the first half of 2010 were $161.6 million, a 28% increase from $126.6 million in the first half of 2009, resulting mostly from a 30% increase in average assets under management.


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