* 3rd-qtr profit 94 cents/share vs Street view 84 cents
* Net cash inflows $4.3 bln
* Shares see-saw in early trading
By Ross Kerber
Oct 24 Fund manager T. Rowe Price Group
said on Wednesday third-quarter profit jumped 33 percent,
including one-time investment gains, as rising assets drove up
fees and helped it beat Wall Street expectations.
The Baltimore company also reported net inflows of $4.3
billion during the quarter, a key metric for asset managers,
showing investors still putting money into its mutual funds.
Some analysts had expected even more inflows, however, and
"might be a little bummed" about the $4.3 billion figure, Nomura
analyst Glenn Schorr wrote in a note to investors. T. Rowe Price
shares see-sawed in early trading.
T. Rowe Price Chief Executive James Kennedy said in an
interview the inflows reflected solid fund performance and were
about evenly split between its equity funds and bond products.
"It's another boring quarter from T. Rowe Price. We continue
to perform well, and we continue to control our expenses," he
The company reported third-quarter net income of $247.3
million, or 94 cents a share, up from $185.5 million, or 71
cents per share, a year earlier.
Revenue rose to $769.7 million from $679.4 million, mainly
because higher assets drove up fees.
Assets under management at Sept. 30 were $574.4 billion,
compared with $541.7 billion at June 30. In addition to the
inflows, market appreciation and investment income boosted
assets by $28.4 billion.
The company's latest results included one-time investment
gains from a sale of assets to raise cash to seed a pair of new
funds in Europe.
Those sales resulted in an after-tax gain of 7 cents per
share. Even excluding that gain, earnings still beat Wall Street
expectations of 84 cents a share.
T. Rowe Price shares traded as low as $63.86 and as high as
$65.58 in early dealings, and were last down 15 cents at $64.55.
The shares have outpaced some rivals in the past year as the
company has posted steady inflows to its mutual funds, and on
enthusiasm for its operations in growing overseas markets.
On key issues facing markets, Kennedy said he is "cautiously
optimistic" that progress will be made on European debt issues.
He also said that after the U.S. elections next month it will be
easier for political leaders to make deals on budget issues.
"Most politicians have heard from the people of America that
we want a deal. We don't need a huge austerity program but
rather a deal that keeps the economy going. It needs to attack
the deficit. If they come up with a program like that,
confidence across the U.S. would rise dramatically," he said.