Jan 28 Asset manager T. Rowe Price Group Inc
said on Tuesday its quarterly profit jumped 24 percent,
beating estimates and boosting shares by more than 5 percent, as
healthy inflows to retirement products offset outflows from
other investment areas.
The pattern showed both the appeal of T. Rowe Price's
target-date funds aimed at individual investors in the fourth
quarter and its exposure to withdrawals by institutional
In a note to investors, International Strategy & Investment
Group analyst Glenn Schorr said, "TROW's performance and expense
discipline (remain) rock solid."
Shares jumped 5 percent to $80.36 in morning trading on
Tuesday, outpacing most asset managers.
In an interview on Tuesday, T. Rowe Price Chief Executive
James Kennedy said some of the withdrawals came as institutional
clients changed their investment objectives rather than because
of performance concerns.
Kennedy expects equity markets to benefit from a stabilizing
"The real economy is in better shape than it has been, and
there's more confidence in the sustainability of growth," he
T. Rowe Price earned a net income of $287.7 million, or
$1.06 per share, in the fourth quarter through Dec. 31, compared
with $232 million, or 88 cents per share, a year earlier.
Analysts, on average, had expected the company to earn $1.03
per share, according to Thomson Reuters I/B/E/S.
Assets under management were a record $692.4 billion as of
Dec. 31, the company said. During the quarter, market gains
added $45.1 billion to its assets and the company gained another
$0.1 billion in net cash inflows from investors.
The inflows came as mutual fund investors added $3.8 billion
during the quarter, mostly in its retirement funds and trusts,
T. Rowe Price said.
Still, in other investment portfolios, such as the money it
manages for institutions, there was a net outflow of $3.7
billion in the period, T. Rowe Price said.