T. Rowe Price Group Expects Decline in First Quarter Earnings

Apr 05, 2001, 01:00 ET from T. Rowe Price Associates, Inc.

    BALTIMORE, April 5 /PRNewswire/ -- George A. Roche, President and Chairman
 of T. Rowe Price Group, Inc. (Nasdaq:   TROW), told stockholders at today's
 annual meeting that he expects the firm's earnings for the first quarter to be
 "moderately below" the $.43 per share earned in last year's fourth quarter.
 In the first quarter of 2000, the firm earned $.58 cents per share, which
 reflected higher stock market values and significant investment income from
 venture capital and partnership investments.
     Mr. Roche said the recent sharp declines in domestic and foreign equity
 markets had the most significant impact on 2001's first quarter results.
 Mostly as a result of the sell-off, which broadened from technology stocks to
 other sectors in the first quarter, the firm's assets under management
 declined.  In particular, mutual fund assets declined 11% from $106.3 billion
 at the end of 2000 to $94.8 billion on March 31.
     "Although this is a point of concern for us," Mr. Roche said, "our broadly
 diversified asset base and the sizeable percentage of assets in retirement
 accounts puts us in a relatively strong position over the long run.  We are
 continuing to invest in our business.  We have made a major commitment to
 expand our international business and are investing in other parts of our
 business as well."
     Mr. Roche added, however, that given the current market environment, "we
 are closely reviewing our expenses.  We will manage these expenses very
 carefully this year.  We have a process in place that should result in a
 decline of our expense levels for the full year 2001 versus last year."
     "The outlook for the rest of the year is mixed," Mr. Roche commented.  "We
 expect the economy will remain sluggish for a while as the reverse wealth
 effect continues to dampen consumer confidence and spending.  Growth is
 unlikely to exceed a 1% annual rate through the first half.  This slow growth
 should cause the federal reserve to continue to reduce interest rates to
 prevent a recession.  Falling interest rates are very beneficial for the
 financial markets.  We do not predict the market, but believe most of the
 decline has been experienced."
     The chairman said that the "exploding of the technology bubble was
 inevitable, but the decline has broadened to include a number of stocks which
 were not overvalued.  We believe that many good companies with sound
 fundamentals offer good value for investors today.  Although investment
 returns may be more modest than the high returns of the 1990s, we believe that
 many good investment opportunities exist today.  Our broad diversification by
 investment approach affords our clients a number of ways to invest their
 capital."
     In other business, the company's stockholders elected the 14 nominees for
 the board of directors.  D. William J. Garrett, formerly the Group Chief
 Executive of Robert Fleming Holdings Limited, joins the 13 returning
 directors.  Stockholders also approved the 2001 Stock Incentive Plan.
     In closing the meeting, Mr. Roche said the investment business is
 experiencing a difficult time, but noted that T. Rowe Price is "well
 positioned to take advantage of the changing financial landscape and maintain
 a leadership role in the industry."
     T. Rowe Price serves as investment adviser for more than eight million
 individual and institutional accounts in the T. Rowe Price family of no-load
 mutual funds and other investment portfolios.
 
     Certain statements in this press release may represent "forward-looking
 information," including information relating to anticipated growth in revenues
 or earnings, anticipated changes in the amount and composition of assets under
 management, anticipated expense levels, and expectations regarding financial
 and other market conditions.  For a discussion concerning risks and other
 factors that could affect future results, see "Forward-Looking Information" in
 Item 7 of the company's Form 10-K Annual Report for 2000.
 
 

SOURCE T. Rowe Price Associates, Inc.
    BALTIMORE, April 5 /PRNewswire/ -- George A. Roche, President and Chairman
 of T. Rowe Price Group, Inc. (Nasdaq:   TROW), told stockholders at today's
 annual meeting that he expects the firm's earnings for the first quarter to be
 "moderately below" the $.43 per share earned in last year's fourth quarter.
 In the first quarter of 2000, the firm earned $.58 cents per share, which
 reflected higher stock market values and significant investment income from
 venture capital and partnership investments.
     Mr. Roche said the recent sharp declines in domestic and foreign equity
 markets had the most significant impact on 2001's first quarter results.
 Mostly as a result of the sell-off, which broadened from technology stocks to
 other sectors in the first quarter, the firm's assets under management
 declined.  In particular, mutual fund assets declined 11% from $106.3 billion
 at the end of 2000 to $94.8 billion on March 31.
     "Although this is a point of concern for us," Mr. Roche said, "our broadly
 diversified asset base and the sizeable percentage of assets in retirement
 accounts puts us in a relatively strong position over the long run.  We are
 continuing to invest in our business.  We have made a major commitment to
 expand our international business and are investing in other parts of our
 business as well."
     Mr. Roche added, however, that given the current market environment, "we
 are closely reviewing our expenses.  We will manage these expenses very
 carefully this year.  We have a process in place that should result in a
 decline of our expense levels for the full year 2001 versus last year."
     "The outlook for the rest of the year is mixed," Mr. Roche commented.  "We
 expect the economy will remain sluggish for a while as the reverse wealth
 effect continues to dampen consumer confidence and spending.  Growth is
 unlikely to exceed a 1% annual rate through the first half.  This slow growth
 should cause the federal reserve to continue to reduce interest rates to
 prevent a recession.  Falling interest rates are very beneficial for the
 financial markets.  We do not predict the market, but believe most of the
 decline has been experienced."
     The chairman said that the "exploding of the technology bubble was
 inevitable, but the decline has broadened to include a number of stocks which
 were not overvalued.  We believe that many good companies with sound
 fundamentals offer good value for investors today.  Although investment
 returns may be more modest than the high returns of the 1990s, we believe that
 many good investment opportunities exist today.  Our broad diversification by
 investment approach affords our clients a number of ways to invest their
 capital."
     In other business, the company's stockholders elected the 14 nominees for
 the board of directors.  D. William J. Garrett, formerly the Group Chief
 Executive of Robert Fleming Holdings Limited, joins the 13 returning
 directors.  Stockholders also approved the 2001 Stock Incentive Plan.
     In closing the meeting, Mr. Roche said the investment business is
 experiencing a difficult time, but noted that T. Rowe Price is "well
 positioned to take advantage of the changing financial landscape and maintain
 a leadership role in the industry."
     T. Rowe Price serves as investment adviser for more than eight million
 individual and institutional accounts in the T. Rowe Price family of no-load
 mutual funds and other investment portfolios.
 
     Certain statements in this press release may represent "forward-looking
 information," including information relating to anticipated growth in revenues
 or earnings, anticipated changes in the amount and composition of assets under
 management, anticipated expense levels, and expectations regarding financial
 and other market conditions.  For a discussion concerning risks and other
 factors that could affect future results, see "Forward-Looking Information" in
 Item 7 of the company's Form 10-K Annual Report for 2000.
 
 SOURCE  T. Rowe Price Associates, Inc.