BALTIMORE (AP) — The investment firm T. Rowe Price Group Inc. said Tuesday its third-quarter profit rose nearly 10 percent as revenue rose almost 16 percent, but the results missed Wall Street expectations and its shares fell more than 7 percent.
T. Rowe Price's assets under management tumbled almost 13 percent due to what the company attributed to volatility in global financial markets "resulting from investor concerns over geopolitical and economic uncertainties."
The Baltimore-based investment firm posted net income after distribution to restricted stock shares of $184.6 million, or 71 cents per share, compared with $168.4 million, or 64 cents per share, a year ago.
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Revenue climbed nearly 16 percent to $679.4 million from $586.1 million. Revenue earned from U.S. mutual funds increased 16 percent and investment advisory revenue rose 14 percent.
But analysts surveyed by FactSet expected earnings of 73 cents per share on revenue of $704.5 million.
Its shares fell $3.98, or 7.1 percent, to $52.01 in midday trading. They have down 19 percent year-to-date.
T. Rowe Price invests assets for individuals, institutions, retirement plans and other financial companies. Its offerings include client-focused equity, fixed-income and balanced portfolios; mutual funds; and advisory services.
"Slower economic growth, the intensifying European sovereign debt crisis and the overall lack of effective decision making by political leaders in both the U.S. and Europe have heightened volatility and dampened investor confidence," CEO James A.C. Kennedy said in a statement.
The firm's assets under management fell to $453.5 billion as of Sept. 30 from $520.9 billion as of June 30. It said the $67.4 billion decline included market depreciation, net of income, of $64.8 billion, and net cash outflows of $2.6 billion — the first since the fourth quarter of 2008.
Kennedy said while "most world markets have rebounded at the beginning of the fourth quarter, volatility and a number of policy and political issues continue to cloud the outlook."
"The acute need for real resolutions to the sovereign debt woes of Europe, and to the unsustainable U.S. budget outlook, continues to weigh on consumer and business confidence. Without real progress, economic growth in the developed economies will likely remain subdued and unemployment high," he said.
Kennedy said T. Rowe Price would be vigilant about managing expenses this year and in planning for 2012.
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