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T. Rowe Price (TROW) Q1 Earnings Lag on High Costs

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Have you been eager to see how T. Rowe Price Group, Inc. (TROW - Free Report) performed in Q1 in comparison with the market expectations? Let’s quickly scan through the key facts from this MD-based popular asset management firm’s earnings release this morning:

An Earnings Miss

T. Rowe Price came out with adjusted earnings per share of $1.18, lagging the Zacks Consensus Estimate of $1.20. Adjusted higher expenses were primarily responsible for this earnings miss.

How Was the Estimate Revision Trend?

You should note that the earnings estimate revisions for T. Rowe Price depicted optimism prior to the earnings release. The Zacks Consensus Estimate increased around 1.0% over the last 7 days.

However, T. Rowe Price has a disappointing earnings surprise history. Before posting earnings miss in Q1, the company delivered positive surprises in two out of the prior four quarters. Overall, the company missed the Zacks Consensus Estimate by an average of 0.54% in the trailing four quarters.
 

Revenue Came Higher Than Expected    

T. Rowe Price posted revenues of $1.11 billion, beating the Zacks Consensus Estimate of $1.10 billion. Revenues compared favorably with the year-ago number of $994.1 million as well.

Key Stats to Note:

  • Assets under management increased to $861.6 billion
  • Net revenues depicted 12% year-over-year growth
  • Investment advisory fees constituted 89% of net revenues

What Zacks Rank Says

The estimate revisions that we discussed earlier have driven a Zacks Rank #3 (Hold) for T. Rowe Price. However, since the latest earnings performance is yet to be reflected in the estimate revisions, the rank is subject to change. While things apparently look unfavorable, it all depends on what sense the just-released report makes to the analysts.

(You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.)

Check back later for our full write up on this T. Rowe Price earnings report!

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