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T. Rowe Price Group, Inc. (TROW - Free Report) has reported third-quarter 2023 adjusted earnings per share of $2.17, which outpaced the Zacks Consensus Estimate of $1.76. The bottom line increased 16.7% year over year.
TROW's net revenues were supported by a rise in assets under management (AUM). Further, appreciation in cash and cash equivalents will help the company to continue investing. However, a rise in expenses in the quarter under discussion hinders bottom-line growth.
Net income attributable to T. Rowe Price was $453.2 million, up 17.9% from the prior-year quarter.
Revenues Increase, Expenses Rise
Net revenues in the third quarter increased 5.2% to $1.67 billion from the year-ago quarter. The top line surpassed the Zacks Consensus Estimate of $1.64 billion.
Also, investment advisory fees increased 1.5% from the year-ago quarter to $1.46 billion. Capital allocation-based income increased to $66.1 million from $1.1 million.
On the flip side, total operating expenses increased 7.5% to $1.08 billion in the reported quarter. Our estimate for the metric was $1.15 billion.
As of Sep 30, 2023, T. Rowe Price employed 7,842 associates, down 1.9% from the year-ago quarter.
AUM Rises, Liquidity Position Strong
As of Sep 30, 2023, total AUM grew 9.5% year over year to $1.36 trillion. Our projection was pegged at $1.35 billion.
In the third quarter, net market depreciation and losses of $35.5 billion negatively impacted TROW’s AUM. Also, net cash outflows were $17.4 billion.
The company had substantial liquidity, including cash and cash equivalents of $2.57 billion as of Sep 30, 2023, up from the $1.75 billion as of Dec 31, 2022. This will enable TROW to keep investing.
Our View
T. Rowe Price’s diversified business model, focus on enhancing investment capabilities, broadening distribution reach and improving client partnerships will aid long-term growth. An escalation in AUM also acted as a positive. However, growing dependence on investment advisory fees is concerning, as market fluctuations and a sudden slowdown in overall business activities may hurt this revenue source.
T. Rowe Price Group, Inc. Price, Consensus and EPS Surprise
BlackRock, Inc.’s (BLK - Free Report) third-quarter 2023 adjusted earnings of $10.91 per share handily surpassed the Zacks Consensus Estimate of $8.52. Also, the figure reflects an increase of 14.2% from the year-ago quarter.
BLK’s results benefited from a rise in revenues and higher non-operating income. Further, the AUM balance witnessed improvement. However, higher expenses acted as a headwind for BLK.
Invesco’s (IVZ - Free Report) third-quarter 2023 adjusted earnings of 35 cents per share lagged the Zacks Consensus Estimate of 36 cents. The bottom line, however, rose 2.9% from the prior-year quarter.
IVZ’s results were hurt by a rise in operating expenses and lower revenues. Nevertheless, an increase in the AUM balance on decent inflows aided the results to some extent.
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T. Rowe Price (TROW) Q3 Earnings Beat Estimates, AUM Rises Y/Y
T. Rowe Price Group, Inc. (TROW - Free Report) has reported third-quarter 2023 adjusted earnings per share of $2.17, which outpaced the Zacks Consensus Estimate of $1.76. The bottom line increased 16.7% year over year.
TROW's net revenues were supported by a rise in assets under management (AUM). Further, appreciation in cash and cash equivalents will help the company to continue investing. However, a rise in expenses in the quarter under discussion hinders bottom-line growth.
Net income attributable to T. Rowe Price was $453.2 million, up 17.9% from the prior-year quarter.
Revenues Increase, Expenses Rise
Net revenues in the third quarter increased 5.2% to $1.67 billion from the year-ago quarter. The top line surpassed the Zacks Consensus Estimate of $1.64 billion.
Also, investment advisory fees increased 1.5% from the year-ago quarter to $1.46 billion. Capital allocation-based income increased to $66.1 million from $1.1 million.
On the flip side, total operating expenses increased 7.5% to $1.08 billion in the reported quarter. Our estimate for the metric was $1.15 billion.
As of Sep 30, 2023, T. Rowe Price employed 7,842 associates, down 1.9% from the year-ago quarter.
AUM Rises, Liquidity Position Strong
As of Sep 30, 2023, total AUM grew 9.5% year over year to $1.36 trillion. Our projection was pegged at $1.35 billion.
In the third quarter, net market depreciation and losses of $35.5 billion negatively impacted TROW’s AUM. Also, net cash outflows were $17.4 billion.
The company had substantial liquidity, including cash and cash equivalents of $2.57 billion as of Sep 30, 2023, up from the $1.75 billion as of Dec 31, 2022. This will enable TROW to keep investing.
Our View
T. Rowe Price’s diversified business model, focus on enhancing investment capabilities, broadening distribution reach and improving client partnerships will aid long-term growth. An escalation in AUM also acted as a positive. However, growing dependence on investment advisory fees is concerning, as market fluctuations and a sudden slowdown in overall business activities may 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, TROW 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) third-quarter 2023 adjusted earnings of $10.91 per share handily surpassed the Zacks Consensus Estimate of $8.52. Also, the figure reflects an increase of 14.2% from the year-ago quarter.
BLK’s results benefited from a rise in revenues and higher non-operating income. Further, the AUM balance witnessed improvement. However, higher expenses acted as a headwind for BLK.
Invesco’s (IVZ - Free Report) third-quarter 2023 adjusted earnings of 35 cents per share lagged the Zacks Consensus Estimate of 36 cents. The bottom line, however, rose 2.9% from the prior-year quarter.
IVZ’s results were hurt by a rise in operating expenses and lower revenues. Nevertheless, an increase in the AUM balance on decent inflows aided the results to some extent.