Shares in asset manager T. Rowe Price (TROW:Nasdaq - commentary - research) rose after the company reported a 41% jump in fourth-quarter earnings. Baltimore-based T. Rowe earned $97 million, or 71 cents a share, in its fiscal fourth quarter, compared with $69 million, or 53 cents, in the year-ago period. Revenue rose 22% from a year ago to $345 million.
Analysts surveyed by Thomson First Call had expected the company to post earnings of 66 cents a share on revenue of $338 million.
Assets under management rose 10.9% sequentially and 24% from a year ago to a record $235 billion.
Investment advisory revenue rose 25% from a year ago because of the record rise in assets. Operating expenses for the fourth quarter increased $31 million from the previous quarter's $202 million because of increases in compensation, promotion and advertising costs.
According to T. Rowe, nearly all of the $3.3 billion net inflows to the mutual funds were concentrated in the U.S. stock funds, with more than $2.6 billion going to the Mid-Cap Value, Equity Income, Growth Stock and Capital Appreciation funds. U.S. stock funds had almost $10 billion in net market appreciation, while international stock funds showed almost $1.5 billion of appreciation during the final quarter of 2004.
"The strong finish to 2004 provides considerable momentum to the economy and the markets in 2005," said T. Rowe Chairman George Roche. "It will not be entirely smooth sailing, however. The nation's trade and budget deficits are a growing concern, and high commodity prices suggest that inflation, which has been contained for some time, is likely to pick up at some point. We believe that the Fed will continue to hike interest rates toward a more neutral level that neither stimulates nor stifles economic growth."
T. Rowe shares rose 22 cents to $59.10.
