Retail clients drive deposits, profits at T. Rowe

Money manager relies on individuals saving for retirement, rising stock prices to offset institutional withdrawals.
JUN 03, 2014
T. Rowe Price Group Inc. (TROW), the money manager that has reported a profit every quarter since going public in 1986, said first-quarter earnings rose 25% as retirement savers helped lift assets. T. Rowe has relied on individual investors saving for retirement and rising stock-market valuations to bolster assets for much of the past year as it struggled with withdrawals by institutional clients. Assets rose 2.7% from the prior quarter to $711.4 billion. “Industry data suggests that retail mutual fund segment was pretty good in the first quarter,” James Shanahan, an analyst who covers the company at Edward Jones & Co. in St. Louis, said in an e-mail before results were announced. (See also: Are active ETFs finally growing in popularity?) Net deposits totaled $8.8 billion in the first three months of 2014. The Standard & Poor's 500 Index of large U.S. stocks advanced 1.3% during the quarter and 19% in the year ended March 31. Net income at T. Rowe increased to $301.1 million, or $1.12 a share, from $240.1 million, or 91 cents, a year earlier, the Baltimore-based company said Thursay in a statement. Earnings beat the $1.03 average estimate of 10 analysts in a Bloomberg survey. BlackRock Inc. (BLK), the world's largest asset manager, said on April 17 that its first-quarter net income climbed 20% to $756 million. Investors deposited a net $27 billion. Through Wednesday, T. Rowe shares were off 3.1% this year compared with a 5% drop for the Standard & Poor's 18-company index of asset managers and custody banks. (Bloomberg News)

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