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T. Rowe Price (TROW) Q1 Earnings Miss Estimates, Costs Rise

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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 Maryland-based popular asset management firm’s earnings release this morning:

An Earnings Miss

T. Rowe Price came out with adjusted earnings per share of $1.74, lagging the Zacks Consensus Estimate of $1.78. The results were impacted by higher operating expenses and lower non-operating income, partially offset by higher assets under management.

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 has been revised 1.7% upward over the last seven days.

Also, T. Rowe Price has a decent earnings surprise history. Before posting earnings miss in Q1, the company delivered positive surprises in three of the prior four quarters. Overall, the company beat the Zacks Consensus Estimate by an average of 6.28% in the trailing four quarters.

T. Rowe Price Group, Inc. Price and EPS Surprise

Revenues Came in Better Than Expected  

T. Rowe Price posted net revenues of $1.33 billion that surpassed the Zacks Consensus Estimate of $1.30 billion. Also, the reported figure compares favorably with the year-ago number of $1.13 billion.   

Key Stats to Note:

  • Assets under management increased 17.7% year over year to $1.01 billion
  • Operating expenses depicted 21.8% year-over-year growth to $744.2 million.
  • Investment advisory fees constituted nearly 90% 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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