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T. Rowe Price (TROW) Q1 Earnings: Disappointment in Store?
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T. Rowe Price Group, Inc. (TROW - Free Report) is scheduled to report first-quarter 2018 results, before the opening bell on Apr 25, with its revenues and earnings projected to improve year over year. Moreover, growth in assets under management (AUM) is expected.
Last quarter, T. Rowe Price outpaced the Zacks Consensus Estimate, driven by rise in revenues. Also, AUM growth remained strong.
Further, T. Rowe Price recorded positive earnings surprise in three out of the trailing four quarters, delivering an average positive surprise of 6.28%.
However, activities of the company in the first quarter were inadequate to win analysts’ confidence. As a result, the Zacks Consensus Estimate for earnings of $1.75 remained unchanged over the last seven days. Also, the figure indicates year-over-year rise of 48.31%.
The Zacks Consensus Estimate for sales of $1.3 billion for the quarter also reflects a jump of 16.36% from the year-ago quarter.
Let’s see how things have shaped up for this announcement.
Earnings Whispers
According to our proven model, we cannot conclusively predict if T. Rowe Price will likely beat the Zacks Consensus Estimate this time. That’s because it doesn’t have the right combination of the two key ingredients — positive Earnings ESP and a Zacks Rank #3 (Hold) or better — to increase the odds of an earnings beat.
You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks ESP: The company has an Earnings ESP of -2.18%.
Zacks Rank: T. Rowe Price currently carries a Zacks Rank of 3, which increases the predictive power of ESP. However, we also need a positive ESP to be confident of an earnings beat.
Factors to Influence Q1 Results
Expenses to Escalate: The company did not point out anything related to its cost-control initiatives during the quarter. It incurs significant expenditures to attract new investment advisory clients and additional investments from existing clients. Though T. Rowe Price projects operating expenses to be down in 2018, it is likely that events not currently planned or expected might impact the expense level. Notably, the company anticipates capital expenditures in 2018 to be approximately $180 million, including two-third for technology development.
Mutual Fund Products Performance: According to the Morningstar data, T. Rowe Price witnessed around $9.9 billion of net inflows on a combined basis being outflows in U.S. mutual fund products offset by net inflows excluding transfers to other portfolios in the to-be-reported quarter.
Though the performance of equity markets disappointed in the first quarter, with the S&P 500 index declining 1.2% sequentially, the company is likely to record a rise in AUM on overall inflows. Notably, the Zacks Consensus Estimate for assets under management is $1.02 trillion, up 4.1% sequentially.
Insignificant Fee Waivers: Management believes with the gradually improving interest-rate environment, fee waivers in its money market mutual funds and trusts will be insignificant.
Revenue Growth: T. Rowe Price’s efforts to improve its operating efficiency have resulted in year-over-year top-line growth over the past few years. We believe the company is well poised to sustain this upbeat uptrend, in the near term. This comes on the back of several planned initiatives largely tied with launching investment strategies and vehicles, enhancing client-engagement capabilities in each distribution channel, strengthening distribution channel in the United States, EMEA, and the Asia Pacific, and improving its technology platform and deriving long-term cost efficiencies.
Stocks that Warrant a Look
Here are some stocks you may want to consider, as according to our model these have the right combination of elements to post an earnings beat this quarter.
The Earnings ESP for SVB Financial Group is +1.38% and the stock carries a Zacks Rank of 3. The company is scheduled to release first-quarter results on Apr 26. You can see the complete list of today’s Zacks #1 Rank stocks here.
Cullen/Frost Bankers, Inc. (CFR - Free Report) has an Earnings ESP of +0.31% and carries a Zacks Rank of 3. It is slated to report results on Apr 26.
Eaton Vance Corp. (EV - Free Report) has an Earnings ESP of +0.84% and a Zacks Rank #3. It is set to report results on May 23.
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With battery prices plummeting and charging stations set to multiply, one company stands out as the #1 stock to buy according to Zacks research.
Image: Bigstock
T. Rowe Price (TROW) Q1 Earnings: Disappointment in Store?
T. Rowe Price Group, Inc. (TROW - Free Report) is scheduled to report first-quarter 2018 results, before the opening bell on Apr 25, with its revenues and earnings projected to improve year over year. Moreover, growth in assets under management (AUM) is expected.
Last quarter, T. Rowe Price outpaced the Zacks Consensus Estimate, driven by rise in revenues. Also, AUM growth remained strong.
Further, T. Rowe Price recorded positive earnings surprise in three out of the trailing four quarters, delivering an average positive surprise of 6.28%.
T. Rowe Price Group, Inc. Price and EPS Surprise
T. Rowe Price Group, Inc. Price and EPS Surprise | T. Rowe Price Group, Inc. Quote
However, activities of the company in the first quarter were inadequate to win analysts’ confidence. As a result, the Zacks Consensus Estimate for earnings of $1.75 remained unchanged over the last seven days. Also, the figure indicates year-over-year rise of 48.31%.
The Zacks Consensus Estimate for sales of $1.3 billion for the quarter also reflects a jump of 16.36% from the year-ago quarter.
Let’s see how things have shaped up for this announcement.
Earnings Whispers
According to our proven model, we cannot conclusively predict if T. Rowe Price will likely beat the Zacks Consensus Estimate this time. That’s because it doesn’t have the right combination of the two key ingredients — positive Earnings ESP and a Zacks Rank #3 (Hold) or better — to increase the odds of an earnings beat.
You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks ESP: The company has an Earnings ESP of -2.18%.
Zacks Rank: T. Rowe Price currently carries a Zacks Rank of 3, which increases the predictive power of ESP. However, we also need a positive ESP to be confident of an earnings beat.
Factors to Influence Q1 Results
Expenses to Escalate: The company did not point out anything related to its cost-control initiatives during the quarter. It incurs significant expenditures to attract new investment advisory clients and additional investments from existing clients. Though T. Rowe Price projects operating expenses to be down in 2018, it is likely that events not currently planned or expected might impact the expense level. Notably, the company anticipates capital expenditures in 2018 to be approximately $180 million, including two-third for technology development.
Mutual Fund Products Performance: According to the Morningstar data, T. Rowe Price witnessed around $9.9 billion of net inflows on a combined basis being outflows in U.S. mutual fund products offset by net inflows excluding transfers to other portfolios in the to-be-reported quarter.
Though the performance of equity markets disappointed in the first quarter, with the S&P 500 index declining 1.2% sequentially, the company is likely to record a rise in AUM on overall inflows. Notably, the Zacks Consensus Estimate for assets under management is $1.02 trillion, up 4.1% sequentially.
Insignificant Fee Waivers: Management believes with the gradually improving interest-rate environment, fee waivers in its money market mutual funds and trusts will be insignificant.
Revenue Growth: T. Rowe Price’s efforts to improve its operating efficiency have resulted in year-over-year top-line growth over the past few years. We believe the company is well poised to sustain this upbeat uptrend, in the near term. This comes on the back of several planned initiatives largely tied with launching investment strategies and vehicles, enhancing client-engagement capabilities in each distribution channel, strengthening distribution channel in the United States, EMEA, and the Asia Pacific, and improving its technology platform and deriving long-term cost efficiencies.
Stocks that Warrant a Look
Here are some stocks you may want to consider, as according to our model these have the right combination of elements to post an earnings beat this quarter.
The Earnings ESP for SVB Financial Group is +1.38% and the stock carries a Zacks Rank of 3. The company is scheduled to release first-quarter results on Apr 26. You can see the complete list of today’s Zacks #1 Rank stocks here.
Cullen/Frost Bankers, Inc. (CFR - Free Report) has an Earnings ESP of +0.31% and carries a Zacks Rank of 3. It is slated to report results on Apr 26.
Eaton Vance Corp. (EV - Free Report) has an Earnings ESP of +0.84% and a Zacks Rank #3. It is set to report results on May 23.
Will You Make a Fortune on the Shift to Electric Cars?
Here's another stock idea to consider. Much like petroleum 150 years ago, lithium power may soon shake the world, creating millionaires and reshaping geo-politics. Soon electric vehicles (EVs) may be cheaper than gas guzzlers. Some are already reaching 265 miles on a single charge.
With battery prices plummeting and charging stations set to multiply, one company stands out as the #1 stock to buy according to Zacks research.
It's not the one you think.
See This Ticker Free >>