Price expects to report nice quarter next week

Improved year under way, Roche tells stockholders

April 12, 2002|By William Patalon III | William Patalon III,SUN STAFF

T. Rowe Price Group Inc. should post a modest jump in first-quarter earnings, and expects the rest of this year to be "one of improvement," Chairman and Chief Executive Officer George A. Roche said yesterday at the firm's annual stockholders' meeting.

"The economy is again growing, and corporate earnings should improve as the year progresses," Roche said during his report to shareholders.

"Provided there is not a severe external shock to the system, the financial markets should move modestly higher," Roche said. "This environment should be a good one for your company."

About 60 shareholders attended the meeting at the Hyatt Regency Hotel on Light Street.

T. Rowe expects to announce its first-quarter results Thursday.

Despite a decline in revenue, lower expenses and the elimination of a quarterly charge for amortization should allow the company to exceed the 38 cents per share it earned in the first quarter of 2001, company officials said.

Shareholders elected 15 directors to serve on the T. Rowe Price board until the next stockholders meeting. Roche was among the 15.

Several shareholders asked questions during the 45-minute meeting.

A man who identified himself as Kenneth Bosley of Sparks suggested that the company must do a better job of compensating its nonexecutive employees, contending that he knows of some "who are struggling to make ends meet" because they haven't received raises.

Roche said T. Rowe Price's two greatest assets are its reputation and its employees, and noted that the company has a broad stock option program that includes most employees.

What's more, Roche said, senior-level executives have absorbed "substantial reductions in compensation" as part of the company's move to reduce expenses and avoid job cuts despite difficult economic conditions.

According to the company's latest proxy statement, Roche's 2001 salary of $300,000 was unchanged from 2000 and 1999. The $1.7 million cash bonus he received last year was 32 percent less than the bonuses of $2.5 million he received in each of the two previous years.

And he received no stock options in 2001, after receiving 50,000 options each in 2000 and 1999, the proxy statement said.

Roche's cash bonus was lower last year because of a decline in the company's financial performance, the proxy statement said.

As T. Rowe Price moves deeper into 2002, it does so with several factors in its favor, Roche said.

The company has slashed debt, leaving its financial position stronger now than it was in previous years.

That alone should allow it to keep buying back stock, a move that can boost a company's earnings per share - one of the key metrics Wall Street uses to evaluate a company's prospects.

Already this year, T. Rowe Price has repurchased 550,000 shares at a cost of $21 million.

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