Assets boost Q1 profits at Federated Investors

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Federated Investors reported a 2 percent increase in first quarter profits, just shy of analyst estimates.

The Pittsburgh investment management firm said net income totaled $43 million, or 41 cents per share, vs. earnings of $42.3 million, or 41 cents per share, in the year-ago quarter. Revenue declined 1 percent to $228 million.

Analysts expected Federated to report net income of 42 cents per share.

Assets under management rose 4 percent from year-ago levels to $377.3 billion. The increase was fueled by increases in equity assets, which jumped 11 percent to $37.9 billion, and fixed income assets, which increased 14 percent to a record $52.8 billion. Money market assets rose 2 percent to $279.7 billion.

The first quarter results included fee waivers on money market funds that reduced pre-tax income by $21.7 million. At a shareholder meeting Downtown, President and CEO J. Christopher Donahue said he expects a similar level of waivers in the current quarter.

With the Federal Reserve keeping short-term interest rates at record low levels, money fund operators have had to waive fees they normally charge for managing the portfolios so that investors break even or realize small gains from their investments.

Following the meeting, Mr. Donahue said Federated is looking at possible acquisitions with a focus on the Asia Pacific region. Federated opened an office in Australia last August. The emphasis is on finding a company with good distribution channels and sound investment management skills, particularly in equities, Mr. Donahue said.

Federated reported the results and held its shareholder meeting after the market closed. Its shares closed Thursday at $23.45, up 17 cents. They are up 16 percent this year.


Len Boselovic: or 412-263-1941.


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