T. Rowe Price reports record 3rd-quarter profit

October 24, 1992|By David Conn | David Conn,Staff Writer

T. Rowe Price Associates Inc., a Baltimore-based investment company, reported record third-quarter earnings yesterday, representing an increase of 18.4 percent above its year-ago results.

The company earned $10.3 million, or 68 cents a share, in the third quarter that ended Sept. 30, compared with $8.7 million, or 58 cents a share, in the same period a year ago.

Revenues climbed 18.2 percent, to $62.2 million, from $52.6 million in the third quarter of 1991. The company noted that advertising and promotion expenses, an indicator of how aggressively the company is seeking new funds, were up during the quarter, but were lower than in the second quarter. Fourth-quarter levels are expected to rise "in response to traditional seasonal trends," the company said.

George Collins, the company president, said that "earnings are at an historic high and investor interest in our products remains strong. With only two months remaining in the year, the company expects to enjoy a successful 1992."

T. Rowe Price's stock closed at $38.75 yesterday, up 25 cents a share on the New York Stock Exchange.

T. Rowe Price reported that its mutual funds enjoyed $1.2 billion in net cash inflows in the third quarter. But $500 million of that amount came from the acquisition of six mutual funds from USF&G Corp. The company managed $39.9 billion as of Sept. 30, of which $25.3 billion was in its family of 43 mutual funds.

"While assets are growing, they're growing at a lower rate than some of their principal competitors," said Michael Lipper, of Lipper Analytical Services Corp. in New York, which follows the mutual fund industry.

Still, he said, the strong growth in T. Rowe Price's international stock funds is a good sign, especially in light of a general slowdown in foreign investing. "I guess one would say that this is reassuring," Mr. Lipper suggested, "rather than encouraging."

One investment in the United States turned particularly sour for T. Rowe Price. The company has filed a $6 million lawsuit against National Westminster Bank plc, the British parent of the company that underwrote the stock offering of Phar-Mor Inc., the Wall Street Journal reported yesterday.

Phar-Mor, a Youngstown, Ohio, pharmacy chain, filed for bankruptcy court protection in August amid allegations by the company that its co-founder and several executives embezzled $350 million.

T. Rowe Price's New Horizons Fund bought stock in Phar-Mor in October 1991 based on an offering prospectus from the National Westminster subsidiary that "was obviously misleading," general counsel Henry Hopkins said yesterday.

Three months ended 9/30

.. .. .. .. ..Revenue.. .. .. ..Net.. .. .. ..Share

'92.. .. .. 62,189,000.. .. 10,309,000 .. .. ..0.68

'91.. .. ...52,609,000.. .. .8,678,000.. .. .. 0.58

% change.. .. +18.2.. .. .. .. +18.8.. .. .. .+17.2

Nine months ended 9/30/92

.. .. .. .. ..Revenue.. .. .. ..Net.. .. .. ..Share

'92.. .. .. .179,747,000.. .. 26,138,000.. .. .1.73

'91.. .. .. .149,272,000.. .. 22,012,000.. .. .1.48

% change.. .. ..+20.4.. .. .. ..+18.7.. .. .. .+16.9

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