T. Rowe Price's 1st quarter sets earnings record


T. Rowe Price Associates Inc. yesterday reported earnings rose by 9 percent to a record first-quarter level of $15.0 million, or 50 cents a share.

"We are pleased with the company's performance in this first quarter and, based on our current outlook for the financial markets, expect continued growth for the remainder of the year," said the company's president, George J. Collins.

The stock of the Baltimore-based mutual funds company closed yesterday at $36.625 a share, unchanged.

Revenues, which are primarily based on a small percentage of assets under management, rose by 6.4 percent to $97.8 million, compared to $91.9 million in the same period a year ago. Total assets under management rose to $61.6 billion, a 15.1 percent increase over the $53.5 billion level a year ago.

Net cash inflow, primarily to the stock funds, was almost $800 million during the quarter.

"They're performing pretty well," said James P. Hanbury, an analyst for Wertheim Schroder & Co., a New York investment banking firm. "The earnings should be up this year," he said.

Analysts' predictions of the company's performance were right on target with a mean estimate of 50 cents a share, according to I/B/E/S Inc.

The high estimate was 51 cents and the low was 48 cents.

The increase in per-share earnings, which jumped by 13.6 precent, was also helped by the company's stock repurchase program. The buybacks decreased average outstanding shares to 30 million from 31 million a year ago.

T. Rowe Price's stock had reached a high of $40.25 a share on April 11 -- a 35 percent increase during the last year -- but then started moving down after Prudential Securities Research changed its ranking on the stock from a hold to a sell on April 12.

While saying T. Rowe Price's franchise is "exceptional," Dean Eberling, Prudential's first vice president, said much of the run-up of the price was based on expectations of the stock market. "The business is still a little choppy. So we just felt a more cautious posture was in order."

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