T. Rowe Price Associates Inc. reported yesterday that its profit surged 45 percent in the third quarter, trouncing earnings estimates by Wall Street analysts.
Despite swings in the stock market, Price's revenue, profit and earnings per share in the quarter ending Sept. 30 were records. The company's figures for the first nine months of the year also reached record highs.
The Baltimore-based mutual fund company made $62.2 million, or 48 cents per diluted share, in the third quarter, compared with $43 million, or 33 cents per diluted share, in the corresponding period a year earlier.
Revenue, driven largely by income generated from investment advisory fees, rose 19 percent to $259.9 million in the quarter, compared with $218.6 million in the corresponding period in 1998.
"The quarter was fine," said John A. Hall, an analyst at New York-based Prudential Securities Inc. "The revenue was right where I was expecting it."
Seven analysts surveyed by Zacks Investment Research expected Price to make 43 cents a share in the quarter.
"Obviously, it was a very good quarter," said George A. Roche, Price's chairman and president. "Revenue moved up to a new level; the earnings were very strong."
Shares of Price closed at $29.4375, up 93.75 cents.
Hall said the most impressive aspect of the quarter was that nearly $1 billion flowed into Price's domestic mutual funds, despite the stock market's volatility.
Price had $100.9 billion invested in its mutual funds as of Sept. 30, up $18 billion, or 21.7 percent, from the third quarter in 1998. But the amount of money in the funds declined $1.8 billion between June 30 and Sept. 30 because of gyrations in the stock market.
Overall, Price has $157.4 billion under management, compared with $147.8 billion a year earlier.
In the first nine months of the year, Price's profit jumped 31.1 percent to $169.3 million, or $1.31 per diluted share, compared with $129.1 million, or 99 cents per diluted share in the first nine months of 1998.
Revenue rose 15.4 percent in the nine-month period to $751.5 million, compared with $651.3 million in the corresponding period in 1998.
Price bought nearly 2 million shares of its own stock in the third quarter as the market declined. "A reflection of our confidence in the long-term prospects for the company," Roche said.