T. Rowe Price Group Inc. (TROW:US), the money manager with about three-fourths of its assets in equities, said third-quarter earnings rose 9 percent as a global stock rally boosted the holdings it oversees for clients.
Net income increased to $267.7 million, or $1 a share, from $245.7 million, or 94 cents, a year earlier, the Baltimore-based company said today in a statement. Earnings beat the 97-cent average estimate (TROW:US) of 14 analysts in a Bloomberg survey.
Customers pulled $7.4 billion, the second straight quarter of net redemptions at the money manager that has posted a profit every quarter since going public in 1986. The withdrawals were offset by the appreciation in market values as the MSCI ACWI Index of global stocks rose 7.4 percent in the quarter and 15 percent in the year through Sept. 30.
Withdrawals “are the most relevant metric investors will focus on,” Michael Kim, an analyst in New York with Sandler O’Neil & Partners LP, said in an interview before results were announced. “T. Rowe was at the top of the charts related to organic growth, but that hasn’t been the case for the past few quarters.”
T. Rowe Price’s results were announced before the start of regular U.S. trading. The shares rose 20 percent this year through yesterday, compared with a 34 percent gain for the Standard & Poor’s 20-company index of asset managers and custody banks.
Assets under management increased 5.4 percent in the quarter and 13 percent from a year earlier to $647.2 billion. The company reported record withdrawals of $8 billion in the three months ended June 30 and has now seen net redemptions in three of the last four quarters.
Strong performance and T. Rowe’s retirement-related products had helped the firm attract deposits in each of the past five years. The company gathered $17.1 billion in 2008 when U.S. mutual funds, excluding money-market funds, lost $225 billion to withdrawals.
Janus Capital Group Inc. (JNS:US) said today its third-quarter net income rose 30 percent to $32.6 million as markets boosted assets. Clients withdrew a net $4.2 billion for the Denver-based company’s 17th consecutive quarter of redemptions.
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