UPDATE 2-Franklin Resources profit beats estimates

* EPS $2.23 vs $1.54 a year ago

* Wall Street had expected EPS $1.91

* Investors added $3.2 bln in new money

* Shares up nearly 3 pct (Adds details on earnings, share price)

BOSTON, Jan 27 (Reuters) - Franklin Resources Inc (BEN.N), one of the largest publicly traded U.S. mutual fund companies, said on Thursday that quarterly profit climbed 41 percent, helped by stronger stock markets which boosted revenue.

Investors sent the company's stock price up more than 2.7 percent in early trading, delighted that stronger equity markets had helped boost investment management fees even as demand for the company's portfolios slowed.

Assets under management jumped 21 percent to $670.7 billion from a year ago and the company took in $3.2 billion in new money during the quarter. Even though that marks a dramatic slowdown from the previous quarter when investors added $19.4 billion in new money, investors were optimistic that the company would soon attract new money to its better-paying stock funds after having pulled in billions to its bond funds during the financial crisis.

As the economy recovers and stocks rallied late last year, demand for Franklin's fixed income portfolios slowed. The company reported that its municipal bond assets shrank 8.1 percent as those types of assets suffered heavy losses during the quarter.

Even as flows were less strong than in previous quarters, equity markets gave Franklin, and many other fund managers, a shot in the arm, helping the company's investment management fees grow 29 percent to $1 billion for the quarter.

The company, which manages the popular Franklin Income Fund and Templeton Global Bond Fund, said net income stood at $501.2 million, or $2.23 per share, in its first fiscal quarter ended Dec. 31. That compares with $355.6 million or $1.54 a share a year earlier.

Wall Street analysts had expected $1.91 a share according to Thomson Reuters I/B/E/S.

Revenue increased 23 percent to $1.7 billion.

Franklin Resources shares were up 2.65 percent at $123.53 on Thursday morning, as rival asset manager Janus Capital Group's share price dropped. (Reporting by Svea Herbst-Bayliss; Editing by Derek Caney and Matthew Lewis)