Add Franklin Resources to the list of fund firms that did not do as well as expected in the opening quarter of 2002. The San Mateo, California-based fund firm earned $0.46 per share, one penny shy of the average analyst's estimate of $0.47. The price of Franklin shares fell 1.03 percent on the open.

The firm also reported net flows of $4.5 billion during the first three months of 2002. Franklin has seen better flows than many other fund firms since many of its products have value or international flavors.

Margins at the firm were squeezed by the acquisition of Fiduciary Trust. Indeed, Franklin reversed the pattern see so far this quarter in the reports of most of its rivals.

The fund firm increased assets by more than 27 percent from a year ago to $274.5 billion from $215.7 billion. Revenues were up just 8.4 percent to $626.0 million during the quarter from $577.4 million in 2001. Meanwhile, the bottom line at the firm fell to $120 million from $131.7 million in the first quarter of 2001.

One reason that Franklin's revenues are falling even as its asset base rises is a change in asset allocation. Currently just 54 percent of the firm's assets under management are in equity products, down from 62 percent a year ago.  

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