Federated Investors reported second quarter earnings on Monday in line with analysts' estimates. Diluted earnings per share were $0.46, unchanged from the first quarter in 2004.

The reported income included $2.9 million in costs for an internal review of fund-related trading and $2.1 million for legal fees, compliance, and costs from the sale of Federated's transfer agency unit.

Assets under management fell from $193.9 billion at the end of the first quarter to $183.8 billion at June 30, a drop of 5.2 percent.

Mutual fund assets fell 3.8 percent from $169.6 billion at the end of March to $163.1 billion at the end of the second quarter. Fixed income and money market fund assets both fell, while equity fund assets increased $80 million to $24.1 billion at the end of the second quarter.

Federated executives were hard-pressed to quantify the effect of regulatory investigations in the fund firm during a conference call on Tuesday. The company would be better off if the "entire picture was resolved," said an executive, but Federated is not seeing large negative outflows from the scandals.  

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