T. Rowe's 1Q profit climbs 6 percent despite tough economy

T. Rowe Price Group earned $151.5 million, or 55 cents per share, in the first quarter, compared with profit of $142.9 million, or 51 cents per share, in the first quarter last year.

Profit missed estimates by a penny, according to a survey of analysts conducted by Thomson Financial.

T. Rowe Price charges fees for managing clients' investments. The company's profit stems from how much money clients pour into T. Rowe Price funds, and how well those funds do.

Clients poured $9.7 billion into T. Rowe Price during the first quarter, but a cold stretch for stocks shrank the value of the company's investments under management by $31.1 billion.

The stock market declined about 10 percent during the first quarter, hobbled by concerns about a slowing or even receding economy, illiquidity, a protracted housing slump, and massive losses at investment banks.

Assets under management at the end of March were $378.6 billion, compared with $400 billion at the end of last year.

"The start to 2008 has been anything but upbeat," Chief Executive James A.C. Kennedy said in a statement. "In spite of a very difficult market environment so far this year, we continue to be encouraged by our solid investment management results."

The company said 68 percent of its funds are beating the Lipper averages a benchmark of mutual fund performance for the past year.

Revenue climbed 10 percent to $559.1 million from $508.4 million on higher investment advisory fees. Analysts expected revenue of $567 million.