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T. Rowe Price says profit, assets under management up again

Assets under management and profit continued to grow at T. Rowe Price Group Inc. in the second quarter, aided by better market returns and healthy deposits from individual and institutional investors.

For the quarter that ended June 30, the Baltimore-based asset manager Tuesday reported net income of $204.7 million, or 76 cents per share, compared to 59 cents per share in the second quarter of 2010. T. Rowe Price has posted a profit every quarter since the company went public in 1986.

Analysts polled by Thomson Reuters had expected net income of 77 cents per share.

Assets under management increased $11 billion to a record $520.9 billion in the quarter. Most of the increase came from investor inflows, which accounted for $9.8 billion in the quarter. Market appreciation added another $1.2 billion.

“I think we’re in really good shape,” said T. Rowe Price CEO James A.C. Kennedy in an interview on Tuesday. “We continue to do a good job for our investors, and when they’re happy, everyone ought to be happy.”

Kennedy said the markets continue to be affected by global economic concerns, and of late by the debt ceiling issue that has embroiled legislators in the U.S.

“The markets were a bit confused by what’s going on in Washington and what’s going on in Europe,” Kennedy said. “Hopefully, our politicians will make some tough decisions soon, because this is weighing heavily on the economy and the confidence of the people.”

Kennedy, though, said he was optimistic that the issue would be resolved in time to avoid having the government shut down, but the answer would probably still leave some of the lingering issues in place.

“They can kick the can down the road one more time as they have before,” Kennedy said. “I think they will get something down in time, but it doesn’t mean the long-term debt reduction problem is going to go away.”

T. Rowe Price also said advertising spending during the quarter remained flat compared to the previous quarter. The company expects that trend to continue into the third quarter of 2011, but said for the full year, spending could be up 15 percent from what was spent in 2010.

The company said it also saw employment increase compared to the previous. T. Rowe Price had 5,162 employees as of June 30, which is an increase of 2.2 percent from the 5,052 employees it had at the end of 2010.

T. Rowe’s shares gained 9 cents Tuesday to close at $60.06.