- The Washington Times - Friday, April 25, 2008

BALTIMORE (Bloomberg) — T. Rowe Price Group Inc. shares rose the most in almost eight years after the mutual-fund manager reported its 20th consecutive quarter of higher earnings despite the worst start for U.S. stocks since 2001.

Net income in the first quarter increased 6 percent as the company had record deposits into retirement and stock funds. Assets under management declined 5.4 percent from Dec. 31 to $378.6 billion because of market depreciation, the company said yesterday in a statement.

T. Rowe Price’s five-year stretch of higher earnings has been driven by sales of 401(k) retirement funds and accounts that invest more conservatively as investors get ready to stop working. The firm also drew money from institutions investing in stocks outside the United States. Net inflows were $9.7 billion, the most in any quarter.

“The fact that they were able to attract inflows of that magnitude in this environment was very impressive,” said D.J. Neiman, an analyst with William Blair & Co. in Chicago. Mr. Neiman had expected T. Rowe Price to earn 56 cents a share — the same as the average analyst estimate.

T. Rowe Price shares rose $6.36, or 12 percent, to $60.24, the biggest gain since June 19, 2000. The stock, which earlier in the day reached $61.08, has lost 1.1 percent this year, compared to the 5.4 percent decline of the Standard & Poor’s 500 Index.

Earnings in the quarter rose to $151.5 million, or 55 cents a share, from $142.9 million, or 51 cents, a year earlier. Revenue rose 10 percent to $559 million, driven by an 11 percent gain in investment-advisory fees. Expenses rose 14 percent.

The S&P; 500 Index slumped 9.9 percent in the quarter, the worst start to a year since 2001. Investors pulled $40 billion from U.S. stock funds on concerns that a recession will send equities even lower, according to Emerging Portfolio Fund Research in Cambridge, Mass.

Investors put $3.7 billion into T. Rowe Price’s mutual funds and $6 billion into separately managed accounts. Retirement funds drew $2.8 billion.

Institutional investors put money into T. Rowe Price’s large-company stock funds and global stock funds, including a new one that invests in Africa and the Middle East, Chief Executive James Kennedy said.


Shares of T. Rowe Price surged 12 percent yesterday, the most in eight years, on

solid earnings and record deposits into stock and retirement funds.

Q1 ‘07 142.9 million

Q2 ‘07 162.2

Q3 ‘07 174.8

Q4 ‘07 190.7

Q1 ‘0 $151.5 million

Source: Bloomberg News

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