January 27, 2011

2010 Q4 Earnings: Federated Investors’ Reports Earnings Per Share of $0.45, Declares Dividend

Money market decrease partially offset by increase in equity, fixed income assets

Federated Investors Inc., a Pittsburgh-based money management firm, reported Thursday earnings per share (EPS) of $0.45 for the quarter ended Dec. 31, 2010, compared with $0.42 for the prior quarter and $0.51 for the same quarter last year. Net income was $46.4 million for Q4 2010 compared to $43.1 million for the prior quarter and $51.9 million for the same quarter in 2009.  

Revenue increased by $3.1 million, or 1%, over the previous quarter. However, revenue decreased by $19.5 million, or 7%, when compared with the same quarter in 2010. According to the company, the decrease in revenue primarily reflects a decrease resulting from lower average money market assets. This decrease was partially offset by the impact of increased average fixed income and equity assets.

Federated also recorded a non-cash impairment charge of $3.2 million or $0.02 per diluted share after tax related to intangible assets associated with a prior-year acquisition.

For the full year ended Dec. 31, 2010, Federated reported EPS of $1.73 compared to $1.92 for 2009.  For 2010, net income was $179.1 million compared to $197.3 million for 2009.

Federated's total managed assets were $358.2 billion at Dec. 31, 2010, up $16.9 billion, or 5%, from $341.3 billion reported at Sept. 30, 2010, and down $31.1 billion, or 8%, from $389.3 billion at Dec. 31, 2009. Average managed assets for the fourth quarter were $345.7 billion, up $7.1 billion, or 2%, from $338.6 billion reported for the third quarter, and down $42.4 billion, or 11%, from $388.1 billion reported for fourth quarter of 2009.  

"In the last year, the strategic balance of Federated's diverse product line again benefited our clients and shareholders," said J. Christopher Donahue, the company’s president and chief executive officer, in a statement. "In addition to bond asset growth, strong interest in the Federated Strategic Value Dividend Fund contributed to Federated's equity asset increase during the year as investors moved to classic dividend-paying stocks as a source of income."

Federated's board of directors declared a quarterly dividend of $0.24 per share.  

Operating expenses for 2010 decreased by $204.5 million, or 24%, compared to last year. The decrease primarily reflects lower distribution expenses from fee waivers and lower average money market assets, according to the company. Also contributing to the decrease in operating expenses was the recognition of insurance proceeds in the second quarter 2010.  

Read AdvisorOne's 2010 Q4 earnings calendar for the financial sector for release dates and links to earnings stories.

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