T. Rowe sees record assets under management, increase in profits

T. Rowe Price Group Inc. saw a record quarterly cash flow into target-date retirement portfolios in the first three months of 2012, the company’s CEO said Tuesday.

“When people are thinking about adding more money into the marketplace, people, thankfully, are thinking of us, so we had abnormally strong flows in the first quarter,” said James A.C. Kennedy, president and CEO of T. Rowe Price.

The Baltimore-based asset manager reported $12.4 billion in cash flows during the first quarter, including $4.2 billion into target-date retirement portfolios.

“Over $4 billion of flows in the first quarter is pretty phenomenal,” Kennedy said. “That’s the strongest quarter we’ve ever had in terms of flows into retirement date portfolios.”

Market appreciation and income of $52.9 billion also boosted the company’s earnings, with T. Rowe reporting a record $554.8 billion in assets under management at the end of the first quarter, an increase of $65.3 billion, or 13 percent, from $489.5 billion in the last quarter of 2011.

Average assets under management for the quarter were $530.3 billion, an increase of $31.9 billion, or 6 percent, from a year ago.

“It seemed like everything was working very strongly in the first quarter,” Kennedy said, adding that he doesn’t expect to see the same strength as the year continues and state, national, and international political uncertainties affect the market.

T. Rowe’s first-quarter profit increased by about 1.5 percent to $197.5 million, or 75 cents per diluted share, from $194.6 million, or 72 cents per diluted share, in the corresponding period last year. Revenue for the quarter was $728.7 million, compared to $682.4 million in the first three months of 2011.

Analysts polled by Thomson Reuters had been expecting quarterly earnings of 77 cents per share and revenue of $710.5 million.

“We’re reasonably optimistic, but we’re getting tired of all of the uncertainties coming out of Washington,” Kennedy said.

The company’s expenses increased to $412.5 million from $370.9 million, an 11 percent increase driven by increases in pay and hiring.

T. Rowe increased its staff by about 3 percent from the first quarter of 2011, to have 5,230 employees at the end of March. The company has about 150 open positions and is expecting to grow its employees by about 4 percent in 2012, Kennedy said.

Shares of T. Rowe’s stock rose 94 cents, or 1.5 percent, to close at $61.95 in Nasdaq trading.