The rising tide arrived late, but that's better than never for fund shops preparing to post fourth-quarter results.

Asset managers reporting quarterly results in coming weeks are set to benefit from the market's postelection rally, analysts say. Assets under management, the main driver of earnings at money management firms, swelled in the final three months of 2004 as the S&P 500 rose 9% after spending most of the year meandering around the flat line.

"These are still market-driven stocks," says Matt Snowling, analyst at Friedman Billings Ramsey. "You had a strong equity rally in the fourth quarter, so earnings should look good."

Analysts have been raising their estimates ahead of next week's slew of earnings releases, as asset managers across the board have been showing higher-than-expected asset gains.

Morgan Stanley analyst Christopher Meyer, for example, raised his first-quarter 2005 estimate for San Mateo, Calif.-based Franklin Resources ( BEN) to 83 cents from 80 cents last week after the company reported an 11% increase in assets under management during the quarter. Franklin will report fiscal first-quarter earnings before the market opens Jan. 27. Analysts expect Franklin to earn 85 cents for the quarter, 27% higher than last year's 67 cents.

Despite raising his earnings estimate by 3 cents, Meyer is still cautious on both Franklin and the asset management sector, which he views as fully valued. More positive on Franklin is Snowling, who says the company's higher-margin international business will continue to benefit from a falling dollar. Snowling's estimate is a penny ahead of consensus at 86 cents.

Snowling also is partial to Baltimore-based T. Rowe Price ( TROW), but more for its cost-cutting than its international exposure. T. Rowe will report fourth-quarter earnings before the market opens Jan. 28. Snowling expects the company to earn 66 cents for the quarter, a penny ahead of consensus and 22% higher than last year's 53 cents.

"Aside from the strong market appreciation this quarter, the operating leverage inherent in its direct distribution model, share repurchases and the impact of average assets levels rolling forward at higher levels should enable the company to produce 26% year-over-year growth and positive operating leverage," says Snowling in his latest note.

Snowling is less sanguine about Janus ( JNS), the beleaguered Denver-based money manager, which is due to report Jan. 26. Snowling's per-share profit estimate of 14 cents for the quarter is in line with the consensus forecast, though he says on a core basis "the company continues to struggle." Last year Janus earned 23 cents, a period in which the company was fighting to overcome bad publicity from the mutual fund scandal.

Snowling's reservation comes even after Janus reported total assets rose 1.2% last month to $139 billion. But instead of focusing on the rise in the company's asset base, Snowling says the true focus should be on the company's $2.6 billion in outflows from long-term assets.

"The market has been a lifesaver for Janus in that the appreciation has been strong enough to offset the loss of assets through redemptions," says Snowling.

Finally, Alliance Capital ( AC) should report fiscal fourth-quarter earnings before the market opens on Thursday January 27. Analysts are expecting the company to earn 69 cents for the quarter, 3% higher than last year's 67 cents.

Analysts raised their estimates on Alliance last week after the company announced that it would "substantially exceed" the previous fourth-quarter consensus of 64 cents due to higher performance fees. Alliance reported assets under management of $538 billion at the end of December, up 4.7% from Nov. 30.