Reduced fee waivers boost quarterly, yearly profit at Federated Investors
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Federated Investors said profit increased in the fourth quarter and in all of 2012, citing reduced fee waivers for its money market funds and growth in its stock and bond fund businesses.
The Downtown Pittsburgh mutual fund operator reported fourth-quarter profit of $49.6 million, or 44 cents per share, versus profit of $36.9 million, or 36 cents per share, in the year-ago quarter. Revenue increased 13 percent to $244.8 million.
Analysts had forecast profit of 40 cents per share on sales of $253 million.
Federated said profit rose 25 percent in 2012 to $188.1 million, or $1.79 per share.
Revenue increased 6 percent to $945.7 million.
Assets under management topped $379.8 billion, up 3 percent from year-ago levels.
Record-low interest rates have prompted Federated and other money fund operators to waive fees they normally charge money fund investors for managing their investments. That has allowed investors to break even or realize small returns on the funds.
Federated said higher yields paid by its money fund securities enabled it to collect higher fees during the fourth quarter, when waivers reduced pretax income by $15.5 million.
That was 10 percent below the impact waivers had in the year-ago quarter, the company said.
The results were disclosed after Wall Street closed. Federated shares finished today at $22.92, down 9 cents.
First Published January 24, 2013 4:39 pm