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T. Rowe Price Q3 Earnings Beat on AUM Growth & Higher Revenues
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T. Rowe Price Group, Inc. (TROW - Free Report) has reported third-quarter 2024 adjusted earnings per share of $2.57, which beat the Zacks Consensus Estimate of $2.36. Also, the bottom line increased 18.4% year over year.
Find the latest earnings estimates and surprises on the Zacks Earnings Calendar.
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 was a woe.
Net income attributable to T. Rowe Price (on a GAAP basis) was $603 million, which increased 33.1% year over year.
TROW’s Revenues & Expenses Increase
Net revenues in the third quarter increased 6.9% year over year to $1.79 billion. However, the top line missed the Zacks Consensus Estimate of $1.84 billion.
Investment advisory fees increased 11.5% year over year to $1.63 billion. Our estimate for investment advisory fees was $1.61 billion.
Capital allocation-based income plunged significantly to $4.6 million from $66.1 million in the prior-year quarter. The fall was primarily due to the result of overall lower market returns. Our estimate for capital allocation-based income was $41 million.
Total operating expenses increased 7.6% to $1.17 billion in the reported quarter. Our estimate for the metric was $1.23 billion.
As of Sept. 30, 2024, T. Rowe Price employed 8,104 associates, up 3.3% year over year.
TROW’s AUM Rises, Liquidity Position Strong
As of Sept. 30, 2024, the total AUM grew 21.1% year over year to $1.63 trillion. Our projection was $1.62 billion.
In the third quarter, net market appreciation and income of $74 billion positively impacted TROW’s AUM. However, net cash outflows were $12.2 billion.
The company had substantial liquidity, including cash and cash equivalents of $3.17 billion as of Sept. 30, 2024, up from $2.6 billion as of Sept 30, 2023. This will enable TROW to keep investing.
TROW’s Capital Distribution Activities
The company distributed a total of $354 million to shareholders through common stock dividends and share repurchases in the third quarter.
Our View on TROW
TROW’s solid AUM balance, broadening distribution reach and efforts to diversify business through acquisitions are likely to support the top-line growth. Solid liquidity aids sustainable capital distributions. However, an elevated expense base will likely hinder bottom-line growth.
T. Rowe Price Group, Inc. Price, Consensus and EPS Surprise
Lazard Inc.’s (LAZ - Free Report) third-quarter 2024 adjusted earnings per share of 38 cents missed the Zacks Consensus Estimate of 41 cents. This compared favorably with earnings of 10 cents in the year-ago quarter.
Lazard’s results were negatively impacted due to a rise in expenses and weak performance in the corporate segment. Nonetheless, an increase in revenues in the financial advisory and asset management segment, along with a rise in AUM balances offered support.
Invesco’s (IVZ - Free Report) third-quarter 2024 adjusted earnings of 44 cents per share came in line with the Zacks Consensus Estimate. The bottom line increased 25.7% from the prior-year quarter.
IVZ’s results were primarily aided by a decline in adjusted expenses and higher adjusted net revenues. An increase in the AUM balance on decent inflows was a positive too.
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T. Rowe Price Q3 Earnings Beat on AUM Growth & Higher Revenues
T. Rowe Price Group, Inc. (TROW - Free Report) has reported third-quarter 2024 adjusted earnings per share of $2.57, which beat the Zacks Consensus Estimate of $2.36. Also, the bottom line increased 18.4% year over year.
Find the latest earnings estimates and surprises on the Zacks Earnings Calendar.
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 was a woe.
Net income attributable to T. Rowe Price (on a GAAP basis) was $603 million, which increased 33.1% year over year.
TROW’s Revenues & Expenses Increase
Net revenues in the third quarter increased 6.9% year over year to $1.79 billion. However, the top line missed the Zacks Consensus Estimate of $1.84 billion.
Investment advisory fees increased 11.5% year over year to $1.63 billion. Our estimate for investment advisory fees was $1.61 billion.
Capital allocation-based income plunged significantly to $4.6 million from $66.1 million in the prior-year quarter. The fall was primarily due to the result of overall lower market returns. Our estimate for capital allocation-based income was $41 million.
Total operating expenses increased 7.6% to $1.17 billion in the reported quarter. Our estimate for the metric was $1.23 billion.
As of Sept. 30, 2024, T. Rowe Price employed 8,104 associates, up 3.3% year over year.
TROW’s AUM Rises, Liquidity Position Strong
As of Sept. 30, 2024, the total AUM grew 21.1% year over year to $1.63 trillion. Our projection was $1.62 billion.
In the third quarter, net market appreciation and income of $74 billion positively impacted TROW’s AUM. However, net cash outflows were $12.2 billion.
The company had substantial liquidity, including cash and cash equivalents of $3.17 billion as of Sept. 30, 2024, up from $2.6 billion as of Sept 30, 2023. This will enable TROW to keep investing.
TROW’s Capital Distribution Activities
The company distributed a total of $354 million to shareholders through common stock dividends and share repurchases in the third quarter.
Our View on TROW
TROW’s solid AUM balance, broadening distribution reach and efforts to diversify business through acquisitions are likely to support the top-line growth. Solid liquidity aids sustainable capital distributions. However, an elevated expense base will likely hinder bottom-line 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, TROW carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Performance of Other Asset Managers
Lazard Inc.’s (LAZ - Free Report) third-quarter 2024 adjusted earnings per share of 38 cents missed the Zacks Consensus Estimate of 41 cents. This compared favorably with earnings of 10 cents in the year-ago quarter.
Lazard’s results were negatively impacted due to a rise in expenses and weak performance in the corporate segment. Nonetheless, an increase in revenues in the financial advisory and asset management segment, along with a rise in AUM balances offered support.
Invesco’s (IVZ - Free Report) third-quarter 2024 adjusted earnings of 44 cents per share came in line with the Zacks Consensus Estimate. The bottom line increased 25.7% from the prior-year quarter.
IVZ’s results were primarily aided by a decline in adjusted expenses and higher adjusted net revenues. An increase in the AUM balance on decent inflows was a positive too.