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Tickers in this Article: TROW
T. Rowe Price Group (Nasdaq:TROW) announced its results for the third quarter on October 24, 2012. T. Rowe Price, a financial services holding company, provides investment advisory services to individual and institutional investors in the sponsored mutual funds and other investment portfolios.

Investors care about earnings because they drive stock prices. Strong earnings generally result in the stock price moving up and vice versa. SEE: 5 Tricks Companies Use During Earnings Season

The Numbers: T. Rowe Price Group's latest numbers were good, as the company announced EPS and revenues that came in ahead predictions. The company reported 94 cents per share versus the 84 cents per share estimate and revenues of $769.7 million versus the $760.4 million estimate. EPS rose 32.4% while revenue climbed 13.1% from the same period last year. Revenue rose for a second quarter in a row as T. Rowe Price Group's sales grew 3.5% to $744.2 million in the second quarter as well. T. Rowe Price Group's net income for the third quarter was $247.3 million, a 33.3% increase from last year. Last quarter marked the third in a row of rising net income.

Management Quote: James A.C. Kennedy, the company's chief executive officer and president, commented: "Despite global economic worries, equity markets rose during the third quarter sparked by a wave of central bank actions and strong corporate earnings growth. Bond markets also posted solid gains amid demand for lower-risk assets. The resulting market appreciation, combined with healthy total net inflows, boosted the firm's ending and quarterly average assets under management to record highs for a quarter-end period."

A Look Back: Net income has increased 8.8% year-over-year on average across the last five quarters. The biggest gain came in the most recent quarter, when income climbed 33.3% from the year-earlier quarter.

Looking Ahead: Analysts have a more positive outlook about the company's results for next quarter. The average estimate for fourth quarter is 88 cents per share, an increase from 85 cents 60 days ago. Increasing earnings estimate is a positive sign about the company and it typically leads a increase in the stock price. The average estimate for the fiscal year has risen to $3.26 per share from $3.22 in the past month.

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