T. Rowe Price Group Inc., the money manager that has reported a profit every quarter since going public in 1986, said second-quarter earnings rose 23 percent as stock-market gains boosted assets, offsetting client withdrawals.

Net income increased to $302.4 million, or $1.13 a share, from $245.8 million, or 92 cents, a year earlier, the Baltimore- based company said today in a statement. Earnings beat the $1.12 average estimate of 10 analysts in a Bloomberg survey.

T. Rowe has relied on individual retirement savers and rising stock-market valuations to bolster assets for much of the past year as it struggled with withdrawals by institutional clients. Investors withdrew a net $200 million, including $3.8 billion pulled by institutional clients in the three months ended June 30.

“The investment community overall will be really surprised at a global level at outflows for T. Rowe,” James Shanahan, an analyst at Edward Jones & Co. in St. Louis, said in a telephone interview. “The expectation was that the worst was over.”

The shares fell 2.4 percent to $80.30 at 10:14 a.m. in New York trading, making T. Rowe Price the biggest decliner today in the 18-company Standard & Poor’s index of asset managers and custody banks. It had declined 1.8 percent this year through yesterday, compared with a 1.7 percent gain for the index.

Client Flows

Assets under management increased 6.6 percent in the quarter and 20 percent from a year earlier to a record $738.4 billion. Revenue increased 15 percent from the second quarter of 2013 to $984.3 million, outpacing a 12 percent jump in expenses to $511.2 million.

“Although we have seen some fluctuation in our net client flows in the recent few years, our overall investment performance and client service have been very strong,” Chief Executive Officer James Kennedy said in the statement.

The MSCI ACWI Index of global stocks advanced 4.3 percent during the quarter and more than 20 percent in the year ended June 30.

Of T. Rowe Price’s mutual funds, 76 percent beat their comparable Lipper averages over three and five years, while 84 percent outperformed over 10 years, the company said.