The outlook at T. Rowe Price just may be turning a corner. The Baltimore fund complex said that though earnings are continuing to fall, it is seeing a reversal in fund flows. The public-firm reported that net flows hit nearly $1.7 billion during the first quarter. The flows were its strongest in five years, said George A. Roche, chairman and president.

Roche said that assets under management at the firm fell by $2.7 billion during the first quarter because of "weakness in stock market valuations that began in early 2000 have continued for three years". He sounded positive in his outlook despite the decline.

"net cash inflows were quite strong during the quarter, totaling nearly $2.1 billion and offsetting much of the market decline," he noted. The complexes mutual funds accounted for nearly $1.7 billion of those net cash inflows. That was the highest quarterly net inflow in five years, said Roche.

Stock funds had net flows of $881 million and bond and money market funds added an additional $798 million. Four funds -- Equity Income, Mid-Cap Growth, High Yield and Blue Chip Growth funds -- accounted for $855 million of inflows.

Still, the strong flows could not save T. Rowe's bottom line. The Baltimore-based firm that its net income fell 27 percent from a year ago to $38.8 million. That figure was above analyst expectations. The upside surprise was the result of lower expenses for compensation and advertising than originally projected.

Total assets under management were down 1 percent to $139.9 billion. That fall pushed revenues down to $218.8 million.  

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