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T. Rowe Price Group, Inc. (TROW - Free Report) has reported third-quarter 2022 adjusted earnings per share of $1.86, which outpaced the Zacks Consensus Estimate of $1.83. The reported figure also declined 45.9% year over year.
The company's net revenues were affected by the decline in assets under management (AUM) and investment advisory fees. Nonetheless, appreciation in cash and cash equivalent will help the company to continue investing.
Net income attributable to T. Rowe Price was $384.4 million, down 50.5% from the prior-year quarter.
Revenues Decrease, Expenses Rise
Net revenues in the third quarter decreased 18.7% to $1.59 billion from the year-ago quarter. The decline was mainly due to a fall in investment advisory fees. The reported figure surpassed the Zacks Consensus Estimate of $1.54 billion.
Investment advisory fees fell 20.5% year over year to $1.44 billion. Nonetheless, administrative, distribution and servicing fees increased 3.1% to $145.1 million.
Total operating expenses increased 5.8% year over year to $1.01 billion in the reported quarter.
As of Sep 30, 2022, T. Rowe Price employed 7,990 associates, up 6.1% from the end of 2021.
AUM Dips, Liquidity Position Strong
As of Sep 30, 2022, total AUM fell 23.7% year over year to $1.23 trillion. In the September-end quarter, net market depreciation and net distributions not reinvested of $55.1 billion, and net cash outflow of $24.6 billion reduced TROW’s AUM.
T. Rowe Price had substantial liquidity, including cash and cash equivalent of $2.36 billion as of Sep 30, 2022, up from $1.52 billion as of Dec 31, 2021. This will enable TROW to keep investing.
Capital Deployment Activity
In the reported quarter, T. Rowe Price repurchased 1.9 million shares of its common stock for $224.5 million.
Our Viewpoint
A challenging operating backdrop and geopolitical concerns have affected TROW’s AUM in recent months. Going forward, the increased dependence on investment advisory fees is concerning, as market fluctuations and a sudden slowdown in overall business activities could hurt this revenue source.
T. Rowe Price Group, Inc. Price, Consensus and EPS Surprise
BlackRock, Inc.’s (BLK - Free Report) third-quarter 2022 adjusted earnings of $9.55 per share surpassed the Zacks Consensus Estimate of $7.93. The figure reflects a decrease of 15.8% from the year-ago quarter.
Results benefited from a decline in expenses. However, lower revenues and AUM balance were the major headwinds for BLK.
Invesco’s (IVZ - Free Report) third-quarter 2022 adjusted earnings of 34 cents per share missed the Zacks Consensus Estimate of 43 cents by a significant margin. The bottom line plunged 55.8% from the prior-year quarter. Our estimate for earnings was 49 cents.
Results have been adversely impacted by lower AUM balance and long-term outflows, which hurt revenues. However, a decline in operating expenses was a tailwind for Invesco.
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T. Rowe Price (TROW) Q3 Earnings Beat Estimates, AUM Dips Y/Y
T. Rowe Price Group, Inc. (TROW - Free Report) has reported third-quarter 2022 adjusted earnings per share of $1.86, which outpaced the Zacks Consensus Estimate of $1.83. The reported figure also declined 45.9% year over year.
The company's net revenues were affected by the decline in assets under management (AUM) and investment advisory fees. Nonetheless, appreciation in cash and cash equivalent will help the company to continue investing.
Net income attributable to T. Rowe Price was $384.4 million, down 50.5% from the prior-year quarter.
Revenues Decrease, Expenses Rise
Net revenues in the third quarter decreased 18.7% to $1.59 billion from the year-ago quarter. The decline was mainly due to a fall in investment advisory fees. The reported figure surpassed the Zacks Consensus Estimate of $1.54 billion.
Investment advisory fees fell 20.5% year over year to $1.44 billion. Nonetheless, administrative, distribution and servicing fees increased 3.1% to $145.1 million.
Total operating expenses increased 5.8% year over year to $1.01 billion in the reported quarter.
As of Sep 30, 2022, T. Rowe Price employed 7,990 associates, up 6.1% from the end of 2021.
AUM Dips, Liquidity Position Strong
As of Sep 30, 2022, total AUM fell 23.7% year over year to $1.23 trillion. In the September-end quarter, net market depreciation and net distributions not reinvested of $55.1 billion, and net cash outflow of $24.6 billion reduced TROW’s AUM.
T. Rowe Price had substantial liquidity, including cash and cash equivalent of $2.36 billion as of Sep 30, 2022, up from $1.52 billion as of Dec 31, 2021. This will enable TROW to keep investing.
Capital Deployment Activity
In the reported quarter, T. Rowe Price repurchased 1.9 million shares of its common stock for $224.5 million.
Our Viewpoint
A challenging operating backdrop and geopolitical concerns have affected TROW’s AUM in recent months. Going forward, the increased dependence on investment advisory fees is concerning, as market fluctuations and a sudden slowdown in overall business activities could hurt this revenue source.
T. Rowe Price Group, Inc. Price, Consensus and EPS Surprise
T. Rowe Price Group, Inc. price-consensus-eps-surprise-chart | T. Rowe Price Group, Inc. Quote
Currently, T. Rowe Price carries a Zacks Rank #5 (Strong Sell).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Performance of Other Asset Managers
BlackRock, Inc.’s (BLK - Free Report) third-quarter 2022 adjusted earnings of $9.55 per share surpassed the Zacks Consensus Estimate of $7.93. The figure reflects a decrease of 15.8% from the year-ago quarter.
Results benefited from a decline in expenses. However, lower revenues and AUM balance were the major headwinds for BLK.
Invesco’s (IVZ - Free Report) third-quarter 2022 adjusted earnings of 34 cents per share missed the Zacks Consensus Estimate of 43 cents by a significant margin. The bottom line plunged 55.8% from the prior-year quarter. Our estimate for earnings was 49 cents.
Results have been adversely impacted by lower AUM balance and long-term outflows, which hurt revenues. However, a decline in operating expenses was a tailwind for Invesco.