Investment firm T. Rowe Price (TROW - Get Report)  says it will keep investing in expansion despite lower revenue during a volatile first quarter and the likelihood of only "modest" financial-market returns this year. 

The Baltimore-based company reported profit of $1.15 a share in the three months through March, beating the average estimate of $1.03 a share from analysts in a Bloomberg survey. Net income fell 5% from the previous year to $295.2 million, and revenue of $994.1 million trailed Wall Street projections of $1.01 billion. 

"Although this volatile quarter for global markets ended with a sharp rebound, the steep declines through mid-February negatively impacted our average assets under management, and therefore our revenues," president and CEO William Stromberg said in a statement

Average assets under management dropped 4% from a year earlier to $728.1 million, and the company also saw significant decreases in its investment advisory revenue. Like other finance firms and banks, T. Rowe Price is grappling with economic pressure in China, low commodities prices, a strong U.S. dollar, and uncertainty about the pace and timing of interest-rate increases in the U.S.

With a market value of $19 billion, the company has climbed 8.2% so far this year to $77.36 in New York trading. Executives are forecasting "moderate growth" in the U.S. as well as Europe, a region where the firm has been expanding. It now has offices in 16 countries.

"Early indicators suggest that our efforts to engage new investors around the world are gaining traction, and we are working diligently to build on that success," Stromberg said. 

Operating expenses increased by 6% to $583.2 million during the quarter, mostly due to new hires, higher salaries and stock-based incentives. Costs for offices and work space also climbed.

T. Rowe Price mutual funds have invested in online technology companies like driving service Uber, room-sharing service Airbnb, and file-sharing service Dropbox, but recently marked down the value of those holdings because of economic pressure.

Still, Stromberg said, "our solid first-quarter net cash flows were an encouraging sign in a tough environment," and the company noted other other positive indicators as well.

"Although markets are a key driver of our short-term financial results and cause us to be ever mindful of our expenses, our financial strength -- as evidenced by a strong cash position, no debt, and healthy operating cash flows -- has allowed us to continue making strategic investments in people and key priorities," Stromberg said.