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 Group, Inc. (TROW - Free Report) has reported first-quarter 2023 adjusted earnings per share of $1.69, which outpaced the Zacks Consensus Estimate of $1.62. The bottom line, however, declined 35.5% year over year. Our estimate for earnings per share was $1.52.
TROW's net revenues were adversely impacted by the decline in assets under management (AUM) and investment advisory fees. Also, the company recorded a rise in expenses in the quarter. Nonetheless, appreciation in cash and cash equivalent will help the company to continue investing.
Net income attributable to T. Rowe Price was $421.5 million, down 25.8% from the prior-year quarter. Our estimate for the metric was $537 million.
Revenues Decrease, Expenses Rise
Net revenues in the first quarter decreased 17.5% to $1.54 billion from the year-ago quarter. The decline was mainly due to a fall in investment advisory fees. The top line surpassed the Zacks Consensus Estimate of $1.51 billion. Our estimate for total revenues was $1.51 billion.
Investment advisory fees fell 16.3% to $1.39 billion. Administrative, distribution and servicing fees decreased 61.9% to $16.9 million.
Total operating expenses increased 6.9% to $1.05 billion in the reported quarter.Our estimate for the metric was $1.05 billion.
As of Mar 31, 2023, T. Rowe Price employed 7,837 associates, up 3.5% from the prior-year quarter.
AUM Dips, Liquidity Position Strong
As of Mar 31, 2023, total AUM declined 13.5% year over year to $1.34 trillion. In the first quarter, net market depreciation and gains of $83.1 billion, and net cash outflow of $16.1 billion reduced TROW’s AUM.
T. Rowe Price had substantial liquidity, including cash and cash equivalent of $2.09 billion as of Mar 31, 2023, up from $1.75 billion as of Dec 31, 2022. This will enable TROW to keep investing.
Our View
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. However, a diversified business model, focus on enhancing investment capabilities, broadening distribution reach and improving client partnerships will aid long-term growth.
T. Rowe Price Group, Inc. Price, Consensus and EPS Surprise
BlackRock, Inc.’s (BLK - Free Report) first-quarter 2023 adjusted earnings of $7.93 per share surpassed the Zacks Consensus Estimate of $7.71. However, the figure reflects a decrease of 16.7% from the year-ago quarter. Our estimate for adjusted earnings was $7.37.
BLK's results benefited from a decline in expenses. However, lower revenues and AUM balance were major headwinds.
Invesco’s (IVZ - Free Report) first-quarter 2023 adjusted earnings of 38 cents per share surpassed the Zacks Consensus Estimate of 36 cents. The bottom line, however, plunged 32.1% from the prior-year quarter. Our estimate for earnings was 31 cents.
Results benefited from a decline in operating expenses. However, lower AUM balance and long-term outflows hurt IVZ’s revenues.
Zacks' 7 Best Strong Buy Stocks (New Research Report)
Valued at $99, click below to receive our just-released report predicting the 7 stocks that will soar highest in the coming month.
Image: Bigstock
T. Rowe Price (TROW) Q1 Earnings Beat Estimates, AUM Dips Y/Y
T. Rowe Price Group, Inc. (TROW - Free Report) has reported first-quarter 2023 adjusted earnings per share of $1.69, which outpaced the Zacks Consensus Estimate of $1.62. The bottom line, however, declined 35.5% year over year. Our estimate for earnings per share was $1.52.
TROW's net revenues were adversely impacted by the decline in assets under management (AUM) and investment advisory fees. Also, the company recorded a rise in expenses in the quarter. Nonetheless, appreciation in cash and cash equivalent will help the company to continue investing.
Net income attributable to T. Rowe Price was $421.5 million, down 25.8% from the prior-year quarter. Our estimate for the metric was $537 million.
Revenues Decrease, Expenses Rise
Net revenues in the first quarter decreased 17.5% to $1.54 billion from the year-ago quarter. The decline was mainly due to a fall in investment advisory fees. The top line surpassed the Zacks Consensus Estimate of $1.51 billion. Our estimate for total revenues was $1.51 billion.
Investment advisory fees fell 16.3% to $1.39 billion. Administrative, distribution and servicing fees decreased 61.9% to $16.9 million.
Total operating expenses increased 6.9% to $1.05 billion in the reported quarter.Our estimate for the metric was $1.05 billion.
As of Mar 31, 2023, T. Rowe Price employed 7,837 associates, up 3.5% from the prior-year quarter.
AUM Dips, Liquidity Position Strong
As of Mar 31, 2023, total AUM declined 13.5% year over year to $1.34 trillion. In the first quarter, net market depreciation and gains of $83.1 billion, and net cash outflow of $16.1 billion reduced TROW’s AUM.
T. Rowe Price had substantial liquidity, including cash and cash equivalent of $2.09 billion as of Mar 31, 2023, up from $1.75 billion as of Dec 31, 2022. This will enable TROW to keep investing.
Our View
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. However, a diversified business model, focus on enhancing investment capabilities, broadening distribution reach and improving client partnerships will aid long-term growth.
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 #3 (Hold). 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) first-quarter 2023 adjusted earnings of $7.93 per share surpassed the Zacks Consensus Estimate of $7.71. However, the figure reflects a decrease of 16.7% from the year-ago quarter. Our estimate for adjusted earnings was $7.37.
BLK's results benefited from a decline in expenses. However, lower revenues and AUM balance were major headwinds.
Invesco’s (IVZ - Free Report) first-quarter 2023 adjusted earnings of 38 cents per share surpassed the Zacks Consensus Estimate of 36 cents. The bottom line, however, plunged 32.1% from the prior-year quarter. Our estimate for earnings was 31 cents.
Results benefited from a decline in operating expenses. However, lower AUM balance and long-term outflows hurt IVZ’s revenues.