Price earns $16.3 million in 3rd quarter

October 27, 1994|By Timothy J. Mullaney | Timothy J. Mullaney,Sun Staff Writer

T. Rowe Price Associates Inc. said yesterday that its third-quarter earnings rose 35 percent, as strong customer demand for international stocks and a limited exposure to tumbling U.S. bonds kept profits rising for the Baltimore mutual fund company despite big losses and layoffs at many Wall Street firms.

"We're in kind of a different business" than a stockbrokerage or investment bank, said George A. Roche, Price chief financial officer. "Our revenues are determined by assets under management, not transactions. We expected things would go reasonably well as long as the financial markets remained reasonably favorable."

And indeed they did, except for the decline in bond values due to rising interest rates. Major stock indexes moved up fairly smartly during the third quarter, Alex. Brown Inc. analyst Kevin O'Brien said. "In a buoyant market for stocks, they're going to tend to be helped by that," Mr. O'Brien said.

The result was a profit of $16.3 million, or 53 cents a share, for the three months that ended Sept. 30. Revenues, at $96.9 million, also were a record. In the 1993 quarter, Price earned $12 million, or 39 cents a share, on $78.8 million of revenue.

"It was a good number," Mr. O'Brien said. "We were the highest [estimate] on the street and they beat our number by a penny" per share.

T. Rowe Price stock gained 25 cents yesterday to close at $30.25.

Steven Eisman, an analyst who follows mutual fund companies for Oppenheimer & Co. in New York, said T. Rowe Price is outperforming other publicly held fund groups. He said most competitors have posted flat or lower earnings, especially companies concentrated in bond funds or closed-end mutual funds.

"Those with a focus on international are doing well," Mr. Eisman said. "They've certainly done a lot better than most."

Mr. O'Brien said T. Rowe Price customers put about $1.8 billion in new investments into T. Rowe Price's international funds and other foreign investments during the quarter, marking about a 10 percent gain in only three months.

"The market has wanted international stocks and we have been marketing the international mutual funds," Mr. Roche said.

Almost $38 billion is invested in the company's mutual funds, which overall added $800 million in assets during the quarter.

Total assets under management at the close of the quarter were $58.2 billion, up $8.3 billion from a year ago.

Price President George J. Collins said in a statement that Price believes its full-year results will set a company record. Mr. Eisman estimated Price will earn 54 cents a share in the fourth quarter, for a yearly total of $2.01 per share.

T. Rowe Price

Associates Inc.

Baltimore ... ... ... ... ... Ticker ... ... ... ... Yesterday's

... ... ... ... ... ... .. .. Symbol ... ... ... ... Cls. ... Chg.

... ... ... ... ... ... .. .. TROW ... ... .. .. ... 30 1/4 .. .. + 1/4

Period ended

9/30 ... ... ... ... ... 3rd qtr. ... ... ... Year ago ... ... Chg.

Revenue .. .. .. ... ... $96,943 ... .. .. .. $78,765 .. .. .. +23.1%

Net Income .. .. ... ... $16,262 ... .. .. .. $12,038 .. .. .. +35.1%

Primary EPS ... .. .. .. $0.53 ... ... ... .. $0.39 ... ... .. +35.9%

... ... ... ... ... 9 mos. ... ... ... ... Year ago ... ... Chg.

Revenue ... ... ... $281,338 ... ... .. .. $220,160 ... ... +27.8%

Net Income .. .. .. $45,064 ... ... ... .. $33,795 .. .. .. +33.3%

Primary EPS ... ... $1.47 ... ... .. .. .. $1.11 ... ... .. +32.4%

Figures in thousands (except per share data)

Baltimore Sun Articles
|
|
|
Please note the green-lined linked article text has been applied commercially without any involvement from our newsroom editors, reporters or any other editorial staff.