Federated reports earnings drop 35%

Federated Investors Inc. today reported net income of $35.1 million, or $0.34 per share, for the first quarter, compared with a net income of $55.8 million, or $0.54, for the comparable quarter last year, representing a 35% decline. For the first quarter, revenue increased to $310.6 million, compared with $305.7 million for the comparable quarter last year. Federated of Pittsburgh derived 71% of its revenue from money market assets, the firm reported. Its total assets reached a record $409.2 billion as of March 31, up from $407.3 billion as of Dec. 31 and $338.5 billion a year earlier. Asset flows for the first quarter were driven by sales of fixed-income products and flows into money market funds, the firm reported. Money market assets in both mutual funds and separate accounts were $360.1 billion as of March 31, from $277.5 billion for the first quarter of 2008. Money market mutual fund assets were $328.8 billion as of March 31, compared with $242.3 billion the comparable period a year earlier, Federated said. Fixed-income assets grew 12% to $25 billion at the end of the first quarter, compared with $22.3 billion a year earlier. At the same time, equity assets declined 38% from a year earlier, dropping to $23.4 billion in the first quarter of 2009, from $37.5 billion the first quarter of last year. As of the first quarter, there was also $700 million in liquidation portfolios.