Sceptre Investment Counsel held a confessional conference call this morning. After announcing second quarter earnings of just 13¢ per share, a significant drop from 16¢ in the first quarter and 25¢ in the quarter a year ago, Sceptre warned that things will likely get worse in the third quarter.

Without elaborating, Sceptre president and CEO, William Malouin, said that he expects the firm to report still lower earnings in the third quarter. He predicted the situation will turn around in the fourth quarter.

Malouin noted that despite improved investment performance the firm is still losing business, both in the Canadian mutual fund side and on the institutional side, where it lost a couple of assignments in the last quarter. Malouin said that the firm expects it will have to post another year of good performance before the business starts coming back, although it was invited to make a couple of proposals in the last quarter. While it didn’t win the mandates, it was nice to at least compete for them, he said.

Sceptre’s partner Putnam Investments has been winning business for the company, said Maluoin, but those assets still haven’t shown up on the bottom line. He said Putnam has a very good success ratio, winning at least two-thirds of the mandates for which it competes, and Sceptre is hoping that by the fourth quarter it can start earning some fees from that business.