We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
T. Rowe Price's (TROW) Q1 Earnings Miss, Revenues Increase
Read MoreHide Full Article
T. Rowe Price Group (TROW - Free Report) reported earnings per share of $1.77 for first-quarter 2018, which lagged the Zacks Consensus Estimate of $1.78. Further, the bottom line improved 14.9% from the year-ago figure of $1.54.
First-quarter results reflect escalating expenses. However. higher revenues and assets under management (AUM) were the positive factors. Also, the company’s strong balance sheet position along with ample liquidity were the other tailwinds.
Net income for the quarter came in at $453.7 million compared with $385.9 million recorded in the prior-year quarter.
Revenues Increase, Expenses Up
Net revenues of $1.33 billion topped the Zacks Consensus Estimate of $1.30 billion. Also, it rose 17.3% from the year-ago quarter. The rise primarily stemmed from higher investment advisory fees that increased 19.8% year over year to $1.19 billion.
Distribution and servicing fees declined nearly 1% to $138.8 million on a year-over-year basis.
Investment advisory revenues generated from the T. Rowe Price mutual funds, distributed in the United States, were up 16.1% year over year to $832.9 million. Investment advisory revenues generated from other investment portfolios, managed by the company, rose 29.4% from the prior-year quarter to $356.3 million.
Total operating expenses were up 21.8% year over year to $744.2 million in the quarter. The rise was mainly due to higher administrative, distributing and compensation expenses.
As of Mar 31, 2018, T. Rowe Price employed 6,878 associates, 8.2% higher than the prior year.
Strong Assets Position
As of Mar 31, 2018, total AUM climbed 22.2% year over year to $1.01 billion. During the quarter, net market appreciation and income came in at $11.8 billion while net cash inflow was $11.3 billion after client transfers.
T. Rowe Price remains debt free with substantial liquidity, including cash and investment in its products of about $4.4 billion as of Mar 31, 2018, which enables it to keep on investing.
Capital Deployment Activity
During the first quarter, T. Rowe Price repurchased 2.9 million shares of its common stock for $313.5 million.
The firm invested $36.7 million during the quarter in capitalized technology and facilities using available cash balances. It projects capital expenditures to be approximately $180 million in 2018, comprising two-thirds for technology development.
Our Viewpoint
T. Rowe Price’s financial stability has the potential to benefit from growth opportunities in the domestic and global AUM. The company’s debt-free position and diverse business model make us confident of its robust fundamentals, moving ahead. Furthermore, strong investment performance is another positive. However, higher operating expenses keep us apprehensive.
T. Rowe Price Group, Inc. Price, Consensus and EPS Surprise
TD Ameritrade Holding Corporation (AMTD - Free Report) reported earnings per share of 73 cents in second-quarter fiscal 2018 (ending Mar 31), beating the Zacks Consensus Estimate by a penny. Moreover, the bottom line increased 66% from the prior-year quarter.
E*TRADE Financial pulled off a positive earnings surprise of 11.4% in first-quarter 2018. Earnings of 80 cents per share surpassed the Zacks Consensus Estimate of 79 cents. Moreover, results compared favorably with 48 cents recorded in the prior-year quarter.
Riding on strong fixed income trading revenues, Goldman Sachs (GS - Free Report) delivered a positive earnings surprise of 22.6% in first-quarter 2018. The company reported earnings per share of $6.95, comfortably beating the Zacks Consensus Estimate of $5.67. Further, the bottom line witnessed 35% year-over-year improvement.
Investor Alert: Breakthroughs Pending
A medical advance is now at the flashpoint between theory and realization. Billions of dollars in research have poured into it. Companies are already generating substantial revenue, and even more wondrous products are in the pipeline.
Cures for a variety of deadly diseases are in sight, and so are big potential profits for early investors. Zacks names 5 stocks to buy now.
Image: Bigstock
T. Rowe Price's (TROW) Q1 Earnings Miss, Revenues Increase
T. Rowe Price Group (TROW - Free Report) reported earnings per share of $1.77 for first-quarter 2018, which lagged the Zacks Consensus Estimate of $1.78. Further, the bottom line improved 14.9% from the year-ago figure of $1.54.
First-quarter results reflect escalating expenses. However. higher revenues and assets under management (AUM) were the positive factors. Also, the company’s strong balance sheet position along with ample liquidity were the other tailwinds.
Net income for the quarter came in at $453.7 million compared with $385.9 million recorded in the prior-year quarter.
Revenues Increase, Expenses Up
Net revenues of $1.33 billion topped the Zacks Consensus Estimate of $1.30 billion. Also, it rose 17.3% from the year-ago quarter. The rise primarily stemmed from higher investment advisory fees that increased 19.8% year over year to $1.19 billion.
Distribution and servicing fees declined nearly 1% to $138.8 million on a year-over-year basis.
Investment advisory revenues generated from the T. Rowe Price mutual funds, distributed in the United States, were up 16.1% year over year to $832.9 million. Investment advisory revenues generated from other investment portfolios, managed by the company, rose 29.4% from the prior-year quarter to $356.3 million.
Total operating expenses were up 21.8% year over year to $744.2 million in the quarter. The rise was mainly due to higher administrative, distributing and compensation expenses.
As of Mar 31, 2018, T. Rowe Price employed 6,878 associates, 8.2% higher than the prior year.
Strong Assets Position
As of Mar 31, 2018, total AUM climbed 22.2% year over year to $1.01 billion. During the quarter, net market appreciation and income came in at $11.8 billion while net cash inflow was $11.3 billion after client transfers.
T. Rowe Price remains debt free with substantial liquidity, including cash and investment in its products of about $4.4 billion as of Mar 31, 2018, which enables it to keep on investing.
Capital Deployment Activity
During the first quarter, T. Rowe Price repurchased 2.9 million shares of its common stock for $313.5 million.
The firm invested $36.7 million during the quarter in capitalized technology and facilities using available cash balances. It projects capital expenditures to be approximately $180 million in 2018, comprising two-thirds for technology development.
Our Viewpoint
T. Rowe Price’s financial stability has the potential to benefit from growth opportunities in the domestic and global AUM. The company’s debt-free position and diverse business model make us confident of its robust fundamentals, moving ahead. Furthermore, strong investment performance is another positive. However, higher operating expenses keep us apprehensive.
T. Rowe Price Group, Inc. Price, Consensus and EPS Surprise
T. Rowe Price Group, Inc. Price, Consensus and EPS Surprise | T. Rowe Price Group, Inc. Quote
The stock currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Performance of Other Investment Managers
TD Ameritrade Holding Corporation (AMTD - Free Report) reported earnings per share of 73 cents in second-quarter fiscal 2018 (ending Mar 31), beating the Zacks Consensus Estimate by a penny. Moreover, the bottom line increased 66% from the prior-year quarter.
E*TRADE Financial pulled off a positive earnings surprise of 11.4% in first-quarter 2018. Earnings of 80 cents per share surpassed the Zacks Consensus Estimate of 79 cents. Moreover, results compared favorably with 48 cents recorded in the prior-year quarter.
Riding on strong fixed income trading revenues, Goldman Sachs (GS - Free Report) delivered a positive earnings surprise of 22.6% in first-quarter 2018. The company reported earnings per share of $6.95, comfortably beating the Zacks Consensus Estimate of $5.67. Further, the bottom line witnessed 35% year-over-year improvement.
Investor Alert: Breakthroughs Pending
A medical advance is now at the flashpoint between theory and realization. Billions of dollars in research have poured into it. Companies are already generating substantial revenue, and even more wondrous products are in the pipeline.
Cures for a variety of deadly diseases are in sight, and so are big potential profits for early investors. Zacks names 5 stocks to buy now.
Click here to see them >>