The Pittsburgh money manager's net income from continuing operation was 54 cents per diluted share for the three months ended June 30, compared with 44 cents per diluted share a year earlier.
The result matched expectations of analysts polled by Thomson Financial.
The firm pulled in $276.5 million in revenue for the quarter, a 17% increase compared with last year. Federated took 48% of its revenue from money market assets, 40% from equity, 11% from fixed income and 1% in miscellaneous products and services.
Assets under management in both mutual funds and separate accounts reached a record $259.7 billion on June 30. That was up $9.2 billion, or 4%, on the quarter and $49.2 billion, or 23%, on the year.
Total equity assets rose by $2 billion during the quarter to $43.3 billion; fixed-income assets fell slightly during the quarter to $23 billion from $23.2 billion at the end of the first quarter.
Clients pulled $437 million more from Federated's stock funds than they added during the quarter, but the outflows were offset by market appreciation of the remaining assets in the funds. They also took a net $135 million out of the firm's bond funds, but added a net $8.6 billion to its money market funds.
During the quarter, the firm purchased over 271,000 shares of class B common stock for $9.6 million.
Federated's board also announced a quarterly dividend of 21 cents per share, payable to all shareholders of record as of August 8, 2007.