Federated Investors Earnings: Investors Are Seeking Moderate Risk Post-Recession

S&P 500 (NYSE:SPY) component Federated Investors Inc. (NYSE:FII) reported a lower net income in first quarter. Federated Investors, Inc. provides investment management products and related financial services, including money market, equity and fixed-income investments.

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Federated Investors Earnings Cheat Sheet for the First Quarter

Results: Net income for Federated Investors Inc. fell to $33.2 million (32 cents/share) vs. $42 million (38 cents/share) a year earlier. A decline of 20.9% from the year earlier quarter.

Revenue: Rose 2.4% to $238.9 million YoY.

Actual vs. Wall St. Expectations: FII reported an adjusted net income of 43 cents per share. By this measure, the company fell in line with the mean analyst estimate of 43 cents/share. Estimates ranged from 41 cents per share to 46 cents per share.

Quoting Management: “As markets have recovered over the past two years, investors are once again becoming comfortable assuming moderate amounts of risk in their portfolios,” said J. Christopher Donahue, president and chief executive officer. “Federated has seen this trend over the past several quarters as our clients have sought out products such as dividend-focused equity and higher-yielding fixed-income strategies.”

Key Stats:

A year-over-year revenue increase last quarter snaps a streak of four consecutive quarters of revenue declines. The worst quarter in that span was the first quarter of the last fiscal year, which saw a 25% decrease.

Net income has dropped 9.4% year over year on average across the last five quarters. Performance was hurt by a 24.4% decline in the third quarter of the last fiscal year from the year earlier quarter.

Competitors to Watch: Franklin Resources, Inc. (NYSE:BEN), Waddell & Reed Financial, Inc. (NYSE:WDR), T. Rowe Price Group, Inc. (NASDAQ:TROW), Affiliated Managers Group, Inc. (NYSE:AMG), SEI Investments Company (NASDAQ:SEIC), Eaton Vance Corp. (NYSE:EV), Janus Capital Group Inc. (NYSE:JNS), U.S. Global Investors, Inc. (NASDAQ:GROW), UBS (NYSE:UBS), Citigroup (NYSE:C), Wells Fargo (NYSE:WFC), Bank of America (NYSE:BAC), JPMorgan (NYSE:JPM), Virtus Investment Partners, Inc. (NASDAQ:VRTS), and Cohen & Steers, Inc. (NYSE:CNS).

Today’s Performance: Shares of FII are unchanged in after hours trading.


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