Market volatility in the second quarter took a bite out of assets that T. Rowe Price Group manages, but the Baltimore company reported Friday that profit rose nearly 60 percent as clients invested more money in its mutual funds.
The money manger's reported quarterly net income of $158.5 million, or 59 cents per share, compared with $100 million, or 38 cents per share, in the corresponding period last year.
Clients poured $5.1 billion into Price's mutual funds and other accounts, continuing the flow of new investments the firm has seen despite the economic downturn. The firm's target-date retirement funds, which adjust to become more conservative as the investor ages, remain popular, drawing $1.6 billion in new investment during the quarter.
"We don't focus on the short term, but focus on performing for clients in the intermediate and long run. If you do that every day, then you're going to be performing for them and when you perform for the clients, they have a tendency to reward you with incremental flows," James A.C. Kennedy, Price's chief executive, said in an interview.
But market declines hurt the firm's assets under management, which fell to $391 billion from $419 billion at the end of the first quarter. The firm's assets are heavily geared toward equity markets compared with its competitors, Wells Fargo Securities analyst Jim Shanahan noted in a research report.
Revenue rose to $577.4 million, up from $442.2 million in the second quarter last year.
Price's per-share earnings of 59 cents fell short of analysts' expectations by a penny. Shares fell $1.59, or 3 percent, to close at $47.85.
The firm has hired 60 workers since the beginning of the year, bringing the work force to 4,862 employees. Kennedy said previously that the company expects to add about 250 jobs this year, most of them in the Baltimore area.
But Price's work force is down about 400 jobs since March 2009, with two-thirds of that due to layoffs last spring as fewer clients opened new accounts and processing volumes fell.