Federated Investors said today that third-quarter profits fell 32 percent on an 11 percent drop in revenue. An increase in fees the Pittsburgh investment manager waived on its money market products and a one-time gain recorded in the same quarter a year ago accounted for the decline.
The company reported net income of $37.7 million, or 36 cents per share, on revenue of $211.9 million vs. earnings of $55.8 million, or 54 cents per share, and revenue of $238.5 million in the year-ago quarter.
The money fund fee waivers reduced pre-tax income by $30.3 million vs. a $16.3 million impact in the year-ago quarter. Near record low short-term interest rates have caused money fund operators to waive fees in order to provide investors with break-even or minimal returns on their investments.
Federated also said the results reflect a non-cash impairment charge of 2 cents per share related to a minority interest investment.
The year-ago results benefited from an insurance related gain of 11 cents per share.
Analysts expected Federated to report earnings of 37 cents per share on sales of $217 million.
The company said it was managing equity, fixed income and money market assets of $366.7 billion at the end of the quarter, up 1 percent from year-ago levels.
Federated disclosed the results after Wall Street closed. Its shares finished Thursday at $28.67, up 66 cents. They are up 42 percent this year.
Len Boselovic: firstname.lastname@example.org or 412-263-1941.