Federated Investors’ Profit Falls on Charge

Investment management company Federated Investors Inc. on Monday said quarterly earnings fell after a charge related to improper trading of mutual funds, but results beat Wall Street estimates.

Federated said fourth-quarter net income fell to $42.8 million, or 38 cents a share, from $48.9 million, or 42 cents a share, a year earlier.

Equity assets increased to a record $25.6 billion at the end of 2003 from $18.1 billion a year earlier and $22.4 billion at the end of the 2003 third quarter. The company said the rise was because of stock market gains and inflows of client money.

Federated shares rose 63 cents, or 2%, to $31.53 on the New York Stock Exchange.

Analysts said the Street was relieved that investors were adding money to the company’s mutual funds rather than pulling out. Several companies caught up in the mutual fund trading scandal have seen millions of dollars withdrawn by angry investors.