April 24 Asset manager T. Rowe Price Inc
said on Wednesday first-quarter profit jumped 22.5
percent as rising markets helped bring in more investment
advisory fees, but concern over withdrawals by institutional
investors sent its shares tumbling.
The Baltimore company reported a net inflow of cash for the
quarter of $3.3 billion, including inflows of $7.6 billion to
its mutual funds. But institutional investors withdrew a net
T. Rowe Price shares were down 4 percent to $73.19 in
The outflows "Cloud Otherwise Strong Story," Nomura analyst
Glenn Schorr titled a note to clients. Schorr maintained his
"neutral" rating on the stock, partly because it trades at a
higher valuation than peers. T. Rowe Price has benefited from
strong-performing funds and a growing retirement business.
Assets under management at March 31 were $617.4 billion, up
from $576.8 billion at the end of December. Market appreciation
added $37.3 billion to the total.
The institutional outflows were tied mainly to non-U.S.
clients who changed their investment objectives, the company
In an interview, T. Rowe Price Chief Executive James Kennedy
acknowledged the institutional outflows but said the firm's
mutual fund flows were among the highest in memory. "Performance
is bringing in the money," he said.
Rising markets have also kindled investor interest in
equities, Kennedy said, though he cautioned that stock markets
are unlikely to keep rising at the first quarter's fast pace.
T. Rowe Price reported net income of $241.9 million, or 91
cents per share, up from $197.5 million, or 75 cents per share,
a year earlier.
Wall Street analysts on average had expected 89 cents per
share, according to Thomson Reuters I/B/E/S.