BALTIMORE (AP) -- T. Rowe Price saw first-quarter earnings growth of 22 percent, but revenue fell short of expectations and expenses rose, sending shares down in early trading Wednesday.
The Baltimore company posted net income after distribution to restricted stock shares of $240.1 million, or 91 cents per share, for the January through March period. That was up from $196.5 million, or 75 cents per share, in the same quarter a year ago.
That was better than the 89 cents that analyst were looking for, according to a poll by FactSet.
However, revenue of $815.7 million fell about $3 million shy of Wall Street expectations.
Revenue rose nearly 12 percent compared with the year-ago quarter, while expenses rose about 7 percent to $443.1 million.
T. Rowe Price's largest revenue source, fees from managing mutual funds and other investments, jumped nearly 13 percent to $702.9 million. Revenue also increased from administrative fees, as well as distribution and servicing fees.
Investment management fee revenue increased in part because of market appreciation as stocks gained. The Standard & Poor's 500 index rose 10 percent during the first quarter.
Assets under management were a record $617.4 billion as of March 31, up from $576.8 billion at the end of 2012.
About $37.3 billion of the increase was due to market appreciation and income. Net deposits into T. Rowe Price funds and other investments totaled $3.3 billion during the latest quarter, a positive trend after investors withdrew a net $4.2 billion during the fourth quarter.
T. Rowe Price attributed the increase in operating expenses in part to higher employee compensation and related costs, which rose $18.3 million. T. Rowe Price increased its average staff size by 3.2 percent compared with the year-ago quarter. The company employed 5,408 workers at the end of March.
Shares of T. Rowe Price Group Inc. fell $2.85, or 3.7 percent, to $73.44 in morning trading. The stock remains near the top end of its 52-week range of $54.47 to $77.14, and is up more than 12 percent this year.