espite slashing operating expenses and more than a tenth of its staff, T. Rowe Price
still missed the consensus earnings estimate by a penny. The Baltimore firm reported it had positive net sales for the quarter. On the positive side, the firm reported net flows of $1.3 billion into funds and $1.2 billion into other asset management accounts.
T. Rowe also said that the firm has cut its head count to 3,575 employees from 4,027, an 11 percent cut, creating one of its largest expense savings. It also cut its marketing expenses by $4.6 million, or roughly a fifth of the previous budget.
T. Rowe Price reported diluted net income rose of $53 million, or 41 cents per share. Those figures were up from $49.3 million or 38 cents a share, in the first quarter of 2001. Analysts had been expecting 42 cents per share.
Revenues at the firm fell to $242.1 million from $280.5 million a year ago. The decline in revenues came even as assets under management at the firm climbed to $159.8 billion from $148.7 billion a year ago and $156.3 billion last quarter.
Mutual fund reached $100 billion, up from $94.8 billion a year ago and $98 billion at the end of 2001. The Small-Cap Value, Mid-Cap Value and Equity Income funds pulled in more than $800 million of the net fund inflows during the quarter.
"We are encouraged by the net cash inflows this quarter, including growth generated by our recently expanded international investment advisory services and the launch of our Luxembourg-based mutual funds in Europe," said George A. Roche
, the company's chairman and president, in a release.
"Also during the quarter, our Section 529 College Savings Plans saw strong inflows, spurred by recent tax law changes. We began providing access on our Web site to several Morningstar investment planning and guidance tools, the first products resulting from an alliance between our firms. We also introduced Advisor Class shares of the Growth Stock Fund as the latest addition to our lineup of funds offered through financial intermediaries."
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