Asset manager T. Rowe Price Group, Inc. (TROW) said Friday that its fourth quarter profit declined slightly from last year, hurt by stock market volatility and higher provision for income tax. However, the company's quarterly earnings per share came in above analysts' expectations as did its quarterly revenue.
The Baltimore-based company reported net income for the fourth quarter of $188.4 million or $0.73 per share, compared to $191.6 million or $0.72 per share for the year-ago quarter.
On average, 21 analysts polled by Thomson Reuters expected the company to earn $0.69 per share for the fourth quarter.
Net revenue for the fourth quarter rose 4% to $671.6 million from $647.5 million in the same quarter last year. Fifteen analysts had a consensus revenue estimate of $658.33 million for the fourth quarter.
Investment advisory revenues for the fourth quarter increased $10.0 million from a year earlier to $570.5 million, as average assets under management were up 5%.
Assets under management at December 31, 2011 totaled $489.5 billion, an increase of $7.5 billion from $482.0 billion a year ago.
Operating expenses were $378.0 million in the fourth quarter of 2011, nearly 4% from last year, mainly due to increases in distribution and servicing costs, depreciation and amortization expense, and compensation and related costs.
Provision for income tax for the fourth quarter was $118.1 million, up from $106.6 million in the fourth quarter of last year.
James Kennedy, the company's chief executive officer and president, said, "With markets facing substantial headwinds, 2011 was an unusually volatile year that tested the patience of investors around the world. The eurozone's sovereign debt problems, lack of political leadership in both Washington and Europe, and concerns about a global economic slowdown led to losses in most global equity markets."
T. Rowe Price shares are currently trading at $59.79, down $1.25 or 2.06%.
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