T. Rowe Price Group announced better-than-expected fourth-quarter earnings on Friday as assets under management soared on inflows, particularly to target-date retirement portfolios.
The firm reported net revenues of $647.5 million, up from $542.6 million, net income of $191.6 million, up from $152.5 million, and diluted earnings per common share of $.72, a jump of 26% from the $.57 per share in the prior year. Assets Under Management rose to $90.7 billion during the year to hit a record $482 billion.
Net cash inflows in the fourth quarter 2010 totaled $6.9 billion, and market appreciation and income added $35.4 billion to assets under management. Investment advisory revenues increased 21%, or almost $99 million, from the prior year.
Meanwhile, investment advisory revenues from T. Rowe Price mutual funds distributed in the U.S. increased 20%, or $63.5 million, to $381.9 million in the fourth quarter of 2010. Net inflows to the sponsored mutual funds were $3.2 billion during the fourth quarter of 2010, including $1.7 billion added to the stock and blended asset funds, $1.4 billion to the bond funds, and $.1 billion to the money market funds.
The target-date retirement investment portfolios added assets under management. During the fourth quarter of 2010, net inflows of $1.3 billion originated in these portfolios bringing total net inflows to $7.5 billion for the year. Assets in the target-date retirement portfolios were $59.4 billion at December 31, 2010, 12% of the firm’s assets under management and nearly 20% of its mutual fund assets.
“Although it was a volatile year, the dramatic and broad-based market recovery that started in 2009 continued through 2010,” said James A.C. Kennedy, the company’s chief executive officer and president, in a statement. “Additionally, our strong investment performance continues to attract assets from existing and new clients. As a result, our year-end assets under management hit a record level.”
Kennedy added that the company’s strong balance sheet and operating cash flow, allowed the firm to weather the storm. “In 2010 we increased our total number of investment professionals, including continuing to add to our team of global research analysts, and broadened our fixed income capabilities. We expanded our investment offerings for individual and institutional clients with the launch of several new equity and fixed-income products,” he added.