Federated Investors 1Q Net Income Down 21% On Legal Expenses
April 28 2011 - 06:39PM
Dow Jones News
Federated Investors Inc. (FII) reported a 21% drop in
first-quarter profits fueled by legal costs related to an expected
settlement of litigation around the money manager's mutual fund
fees.
For the quarter ended Mar. 31, Federated, a top U.S. money
market funds manager, reported net income of $33.2 million, or 32
cents a share, down from $42 million, or 38 cents a share, a year
earlier.
The results for the most recent quarter include an after-tax
charge of 11 cents per share for a one-time legal expense tied to
the expected settlement.
"As markets have recovered over the past two years, investors
are once again becoming comfortable assuming moderate amounts of
risk in their portfolios," Chief Executive J. Christopher Donahue
said in a statement.
The Pittsburgh-based mutual fund company's shares, which closed
up 1.2% at $26.52, were unchanged in post-market trading
activity.
Federated's total assets under management stood at $354.9
billion in the first quarter, up 1% from a year earlier but down 1%
from the prior quarter.
Money market assets in both funds and separate accounts totaled
$271.1 billion as of the first quarter, down $4.9 billion or 2%
from the prior quarter.
Federated's fixed-income assets totaled $41.8 billion at Mar.
2011, up 3% from the fourth quarter. Its equity assets totaled
$31.6 billion in the first quarter, also up 3% from the prior
quarter. Equity and fixed-income net flows for funds and separate
accounts totaled $327 million for the quarter.
Revenue, at $238.9 million, increased by 3% from a year
earlier.
Earlier Thursday, another money manager, Franklin Resources Inc.
(BEN), reported a 41% jump in profit for the fiscal second-quarter
fueled by rallying markets, cash inflows from investors and fee
growth. Franklin Resources' shares closed Thursday at $127.33, up
1.2%.
-By Aparajita Saha-Bubna, Dow Jones Newswires; 617-654-6729;
aparajita.saha-bubna@dowjones.com
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