T. Rowe's Earnings

Third-quarter earnings from asset manager T. Rowe Price (Nasdaq: TROW) underscored that not everyone under the financial-services umbrella is smarting from the recent credit lockup and market turbulence. The company's earnings per share and revenues were up 37 percent and 27 percent, respectively.

The company hit on all cylinders during the quarter. Overall revenue from investment advisory fees was up 29 percent over the prior year, with growth coming from fees collected on mutual funds and managed investment portfolios. Total assets under management were up 4.5 percent over the prior quarter and 19 percent since the close of 2006. Administrative fees rose 16 percent.

On the expense side, compensation and related costs rose almost 24 percent - which management attributed to growth in head count - but overall expenses grew less than 23 percent, showing some nice operating leverage.

Looking at the next quarter, T. Rowe's CEO said the company continues to like stocks in the long term (big surprise!), and that it sees continued global economic growth and expects the U.S. housing problems to work themselves out.

T. Rowe's stock has risen considerably this year, and it isn't particularly cheap at 25 times expected 2007 earnings. Still, given its strong fund flows, stock repurchases, lack of debt and solid cash position, it's hard to dismiss it as an investment candidate.