Federated Investors Inc. Earnings Cheat Sheet: Yet Another Quarter of Profitability

S&P 500 (NYSE:SPY) component Federated Investors Inc. (NYSE:FII) reported its results for the third quarter. Federated Investors 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 Third Quarter

Results: Net income for the asset management company fell to $38.3 million (37 cents per share) vs. $43.1 million (42 cents per share) a year earlier. This is a decline of 11% from the year earlier quarter.

Actual vs. Wall St. Expectations: FII fell in line with the mean analyst estimate of 37 cents per share. It fell short of the average revenue estimate of $228.7 million.

Quoting Management: “Our reputation for offering a broad line of high-quality income strategies, combined with increased investor demand for such products, helped Federated achieve its highest quarterly gross equity fund sales in more than 11 years,” said J.Christopher Donahue, president and chief executive officer. “Notably, Federated Strategic Value Dividend Fund was among the top-selling U.S. stock funds during the third quarter, as the fund and its related separately managed account strategy had $1.5 billion in combined net sales.”

Key Stats:

The company has now fallen in line with estimates for the past two quarters. It reported net income of 41 cents in the second quarter and net income of 43 cents in the first quarter.

Net income has dropped 15.6% 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.

Looking Forward: Over the past ninety days, the average estimate for the fourth quarter has fallen from 43 cents per share to 40 cents, indicating that analysts are growing pessisimistic about the company’s performance next quarter. The average estimate for the fiscal year is $1.50 per share, down from $1.59 ninety days ago.

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), Virtus Investment Partners, Inc. (NASDAQ:VRTS), and Cohen & Steers, Inc. (NYSE:CNS).

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(Source: Xignite Financials)