T. Rowe Price sees growth but falls short of analysts' 1Q expectations

Baltimore-based investment company reports net income of $194.6 million

April 21, 2011|By Gus G. Sentementes, The Baltimore Sun

T. Rowe Price Group Inc., a Baltimore-based mutual fund and investment advisory services company, reported sharp increases in average mutual fund assets under management and investment advisory revenue, but the company's profits fell short of analysts' expectations in the first quarter.

Price said it posted diluted earnings of 72 cents per share — a 26 percent increase over the quarter a year ago. Analysts polled by MarketWatch had expected diluted earnings per share of 75 cents.

The company does not release quarterly earnings guidance to Wall Street analysts, who base their estimates on their own financial models and predictions of Price's performance.

Price's net income was $194.6 million on revenues of $682.4 million in the past quarter. In the first quarter last year, the company reported $153 million profit on revenues of $556.2 million.

Revenues from its investment advisory services increased by $75 million, or 23 percent, to more than $400 million for the quarter, the company said. The net amount of money flowing into mutual funds was $4.4 billion, the company said.

James A.C. Kennedy, Price's chief executive officer and president, said in an interview that, despite geopolitical instabilities in the Middle East and North Africa, higher energy prices and debt problems in Europe, the world economy "is on the mend."

"It's not as strong a recovery as we've seen in previous times," Kennedy said.

Kennedy said the company's funds continue to perform among the best in the industry for investors. He said the company marked its 25th year as a publicly traded company this year.

When Price went public in 1986, it had $19.8 billion in assets under management. Today, the company has a record $509 billion under management.

"This has been a huge success story for Baltimore and Maryland," Kennedy said.

Shares of Price closed Thursday at $64.08, down $2.29, or 3.45 percent.

gus.sentementes@baltsun.com

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