Profit lower at Federated Investors, beats expectations

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Federated Investors today reported lower earnings for the fourth quarter and for all of 2013 as the Pittsburgh investment manager waived more fees on its money market funds to keep investors whole.

The company said it earned $41.1 million, or 39 cents per share, in the fourth quarter versus earnings of $49.6 million, or 44 cents per share, in the year-ago quarter.

Revenue fell 12 percent to $214.7 million.

Federated said waiving fees normally imposed on money market fund investors reduced pretax profit by $29.3 million versus a $15.5 million impact in the year-ago quarter.

The results topped analyst forecasts of earnings of 37 cents per share and revenue of $211 million.

For the full year, Federated reported profit of $162.2 million, or $1.55 per share, versus 2012 earnings of $188.1 million, or $1.79 per share.

Revenue fell 7 percent to $878.4 million. Fee waivers reduced pretax income by $105.1 million versus a $71.2 million impact in 2012.

Money fund operators usually charge investors fees for managing and administering the funds. But because of chronically low short-term interest rates, operators are waiving the fees so that investors break even or earn small returns in the low interest rate environment.

Federated said assets under management totaled $376.1 billion, down 1 percent from the end of 2012.

The results were disclosed after the market closed. Federated shares finished today at $28.25, down 64 cents.

Len Boselovic: or 412-263-1941.

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