T. Rowe Price profits up 30% in 3rd quarter

October 26, 1991|By Timothy J. Mullaney

T. Rowe Price Associates Inc. said yesterday that its third quarter earnings rose 30 percent as a new securities processing business and lower short-term interest rates helped the Baltimore-based mutual fund firm post better-than-expected results.

T. Rowe Price earned $8.7 million, or 58 cents a share, during the three months that ended Sept. 30. In the same months of 1990, the company earned 45 cents a share.

"The earnings were good, better than we were expecting," said Dean Eberling, an analyst who follows T. Rowe Price for Shearson Lehman Bros. Inc. in New York. "The mutual fund business this year is very good. We're seeing a buildup of the momentum that started two years ago."

T. Rowe Price and other mutual fund firms have been helped by lower interest rates, which helped to persuade investors not to roll over their bank certificates of deposit and invest the money in stock mutual funds instead, Steven Norwitz, a T.Rowe Price spokesman, said.

The company's assets under management in mutual funds grew to $20.5 billion on Sept. 30 from 19.3 billion on June 30, the company said.

Mr. Eberling said that the company has also gotten past the start-up costs for its new mutual fund transfer agent business, which he said has become more profitable more quickly than he expected.

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