T. Rowe Price Group, Inc.’s (TROW - Free Report) third-quarter 2023 adjusted earnings per share of $2.17 outpaced the Zacks Consensus Estimate of $1.76. The bottom line also increased 16.7% year over year.
The earnings beat was supported by a rise in net revenues and assets under management (AUM). Particularly, net revenues in the third quarter increased 5.2% to $1.67 billion from the year-ago quarter.
This was backed by higher investment advisory fees (representing around 90% of net revenues), which increased 1.5% year over year to $1.46 billion. Investment advisory fees from multi-asset and alternative asset classes rose 10.4% and 3.3% year over year to $405.5 million and $72.5 million.
A rise in AUM propelled investment advisory fees. As of Sep 30, 2023, total AUM grew 9.5% year over year to $1.36 trillion.
Also, for five years ended Sep 30, 2023, 65% of the T. Rowe Price U.S. mutual funds AUM outperformed the Morningstar median, while 66% outperformed the passive peer median.
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.
Rob Sharps, chief executive officer and president of TROW, commented, "Third quarter trends were largely similar to what we experienced earlier in the year--investment performance was solid and particularly strong in our largest franchises; we made progress on our strategic initiatives; and we executed on planned cost savings efforts. However, our flows remain under pressure, with net outflows from equity outweighing the positive net flows to fixed income, multi-asset, and alternatives this quarter.'
Markedly, a net market depreciation of $35.5 billion and a net cash outflow of $17.4 billion affected the AUM balance.
Also, total operating expenses increased 7.5% to $1.08 billion in the reported quarter. A rise in compensation and related costs, distribution and servicing costs, as well as technology, occupancy and facility costs, resulted in a higher cost base.
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.
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T. Rowe Price Group, Inc.’s (TROW - Free Report) third-quarter 2023 adjusted earnings per share of $2.17 outpaced the Zacks Consensus Estimate of $1.76. The bottom line also increased 16.7% year over year.
The earnings beat was supported by a rise in net revenues and assets under management (AUM). Particularly, net revenues in the third quarter increased 5.2% to $1.67 billion from the year-ago quarter.
This was backed by higher investment advisory fees (representing around 90% of net revenues), which increased 1.5% year over year to $1.46 billion. Investment advisory fees from multi-asset and alternative asset classes rose 10.4% and 3.3% year over year to $405.5 million and $72.5 million.
A rise in AUM propelled investment advisory fees. As of Sep 30, 2023, total AUM grew 9.5% year over year to $1.36 trillion.
Also, for five years ended Sep 30, 2023, 65% of the T. Rowe Price U.S. mutual funds AUM outperformed the Morningstar median, while 66% outperformed the passive peer median.
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.
Rob Sharps, chief executive officer and president of TROW, commented, "Third quarter trends were largely similar to what we experienced earlier in the year--investment performance was solid and particularly strong in our largest franchises; we made progress on our strategic initiatives; and we executed on planned cost savings efforts. However, our flows remain under pressure, with net outflows from equity outweighing the positive net flows to fixed income, multi-asset, and alternatives this quarter.'
Markedly, a net market depreciation of $35.5 billion and a net cash outflow of $17.4 billion affected the AUM balance.
Also, total operating expenses increased 7.5% to $1.08 billion in the reported quarter. A rise in compensation and related costs, distribution and servicing costs, as well as technology, occupancy and facility costs, resulted in a higher cost base.
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.
Research Chief Names "Single Best Pick to Double"
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
This company targets millennial and Gen Z audiences, generating nearly $1 billion in revenue last quarter alone. A recent pullback makes now an ideal time to jump aboard. Of course, all our elite picks aren’t winners but this one could far surpass earlier Zacks’ Stocks Set to Double like Nano-X Imaging which shot up +129.6% in little more than 9 months.
Free: See Our Top Stock And 4 Runners Up
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