T. Rowe Price Net Jumps

Fourth-quarter earnings rise 21%, beating estimates.
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Fourth-quarter earnings rose 21% from a year ago at asset manager

T. Rowe Price

(TROW) - Get Report

, reflecting solid inflows into most portfolio categories.

T. Rowe Price earned $117.5 million, or 85 cents a share, in the quarter, $97.1 million, or 71 cents a share, a year ago. Net revenue rose 17% from last year to $402.8 million. On average, analysts were forecasting earnings of 83 cents a share on revenue of $401.3 million in the most recent quarter.

Baltimore-based T. Rowe Price saw net cash inflows from investors of $5.2 billion during the fourth quarter, lifting its assets under management to a record $269.5 billion at the end of 2005, up 15% from a year ago. Mutual fund assets rose by $5 billion in the quarter to $170.2 billion at Dec. 31, mostly reflecting price appreciation.

By category, international stock funds had nearly $1 billion of net cash inflows, while U.S. stock funds added $300 million, and bond and money market funds saw net redemptions of $500 million. Among products, the Growth Stock Fund led all funds with nearly $800 million of net inflows for the fourth quarter. The Capital Appreciation, Equity Income, New Era and Value funds rounded out the top five funds, each adding more than $800 million of net inflows during the year.

The firm's compensation expense rose 14% from a year ago to $133.1 million. T. Rowe Price said its staff grew by 7% in 2005 to 4,372, reflecting higher volume. "The number of associates, their total compensation costs, and the costs of their employee benefits have all increased," it said.

"The firm's investment advisory results relative to our peers remain exemplary, with at least 70% of the T. Rowe Price funds across their share classes surpassing their comparable Lipper averages on a total return basis for the one-, three-, five-, and 10-year periods ended Dec. 31, 2005. In addition, 59% of our rated retail funds ended the year with an overall rating of four or five stars from Morningstar, compared with 32.5% for the overall industry," T. Rowe Price said.