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T. Rowe Price (TROW) Q1 Earnings Beat Estimates, AUM Grows
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T. Rowe Price (TROW - Free Report) reported first-quarter 2021 adjusted earnings per share of $3.01, which outpaced the Zacks Consensus Estimate of $2.92. The reported figure also climbed 61% year over year.
Results were driven by higher revenues, backed by an upsurge in investment advisory fees. Also, assets under management (AUM) improved. However, escalating expenses were an undermining factor.
Including certain non-recurring items, net income was $749.4 million or $3.17 per share compared with the $343.1 million or $1.41 per share recorded in the prior-year quarter.
Revenues Improve, Expenses Up
Net revenues in the first quarter increased 24.9% to $1.83 billion from the year-ago quarter. The upswing primarily resulted from higher investment advisory and administrative, distribution and servicing fees. The net revenue figure also surpassed the Zacks Consensus Estimate of $1.80 billion.
Investment advisory fees climbed 27.1% year over year to $1.69 billion. Additionally, administrative, distribution and servicing fees jumped 3.1% to $139 million.
Investment advisory revenues earned from T. Rowe Price mutual funds distributed in the United States were up 19.9% year over year to $1.1 billion. Investment advisory revenues earned from other investment portfolios managed by the company increased 41.2% from the prior-year quarter to $637.6 million.
Total adjusted operating expenses flared up 11.2% year over year to $909.2 million in the reported quarter. Including certain one-time items, expenses came in at $933.6 million, up 23.6%. Rise in compensation, distribution and servicing, and technology, occupancy, and facility related costs mainly resulted in this uptick.
As of Mar 31, 2021, T. Rowe Price employed 7,697 associates, 3% higher than the prior year.
Assets Grow, Liquidity Position Strong
As of Mar 31, 2021, total AUM increased 50.5% year over year to $1.52 trillion. During the March-ended quarter, net market appreciation and gains were $46.4 billion, while net cash inflow was $1.2 billion after client transfers.
T. Rowe Price remained debt free with substantial liquidity, including cash and sponsored portfolio investment holdings of $6.86 billion as of Mar 31, 2021. This will enable the company to keep on investing.
Capital Deployment Activity
During the reported quarter, T. Rowe Price repurchased 1.6 million shares of its common stock for $267.6 million, at an average price of $164.22.
Our Viewpoint
T. Rowe Price put up an impressive show during the March-ended period on stellar revenues. The company has the potential to benefit from growth in domestic and global AUM. Though higher operating expenses unfavorably impacted T. Rowe Price and the pandemic-induced economic slowdown is a major concern, the bank’s debt-free position and higher return on earnings, as a whole, make us confident of its robust fundamentals.
T. Rowe Price Group, Inc. Price, Consensus and EPS Surprise
Cohen & Steers’ (CNS - Free Report) first-quarter 2021 adjusted earnings of 79 cents per share lagged the Zacks Consensus Estimate of 81 cents. Nevertheless, the bottom line was 29.5% higher than the year-ago figure.
BlackRock, Inc.’s (BLK - Free Report) first-quarter 2021 adjusted earnings of $7.77 per share outpaced the Zacks Consensus Estimate of $7.64. The figure reflects a rise of 17.7% from the year-ago quarter’s number.
Artisan Partners Asset Management (APAM - Free Report) first-quarter 2021 adjusted earnings came in at $1.13 per share, surpassing the Zacks Consensus Estimate of $1.10. Also, the bottom line was 71% higher than the year-ago quarter figure.
These Stocks Are Poised to Soar Past the Pandemic
The COVID-19 outbreak has shifted consumer behavior dramatically, and a handful of high-tech companies have stepped up to keep America running. Right now, investors in these companies have a shot at serious profits. For example, Zoom jumped 108.5% in less than 4 months while most other stocks were sinking.
Our research shows that 5 cutting-edge stocks could skyrocket from the exponential increase in demand for “stay at home” technologies. This could be one of the biggest buying opportunities of this decade, especially for those who get in early.
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T. Rowe Price (TROW) Q1 Earnings Beat Estimates, AUM Grows
T. Rowe Price (TROW - Free Report) reported first-quarter 2021 adjusted earnings per share of $3.01, which outpaced the Zacks Consensus Estimate of $2.92. The reported figure also climbed 61% year over year.
Results were driven by higher revenues, backed by an upsurge in investment advisory fees. Also, assets under management (AUM) improved. However, escalating expenses were an undermining factor.
Including certain non-recurring items, net income was $749.4 million or $3.17 per share compared with the $343.1 million or $1.41 per share recorded in the prior-year quarter.
Revenues Improve, Expenses Up
Net revenues in the first quarter increased 24.9% to $1.83 billion from the year-ago quarter. The upswing primarily resulted from higher investment advisory and administrative, distribution and servicing fees. The net revenue figure also surpassed the Zacks Consensus Estimate of $1.80 billion.
Investment advisory fees climbed 27.1% year over year to $1.69 billion. Additionally, administrative, distribution and servicing fees jumped 3.1% to $139 million.
Investment advisory revenues earned from T. Rowe Price mutual funds distributed in the United States were up 19.9% year over year to $1.1 billion. Investment advisory revenues earned from other investment portfolios managed by the company increased 41.2% from the prior-year quarter to $637.6 million.
Total adjusted operating expenses flared up 11.2% year over year to $909.2 million in the reported quarter. Including certain one-time items, expenses came in at $933.6 million, up 23.6%. Rise in compensation, distribution and servicing, and technology, occupancy, and facility related costs mainly resulted in this uptick.
As of Mar 31, 2021, T. Rowe Price employed 7,697 associates, 3% higher than the prior year.
Assets Grow, Liquidity Position Strong
As of Mar 31, 2021, total AUM increased 50.5% year over year to $1.52 trillion. During the March-ended quarter, net market appreciation and gains were $46.4 billion, while net cash inflow was $1.2 billion after client transfers.
T. Rowe Price remained debt free with substantial liquidity, including cash and sponsored portfolio investment holdings of $6.86 billion as of Mar 31, 2021. This will enable the company to keep on investing.
Capital Deployment Activity
During the reported quarter, T. Rowe Price repurchased 1.6 million shares of its common stock for $267.6 million, at an average price of $164.22.
Our Viewpoint
T. Rowe Price put up an impressive show during the March-ended period on stellar revenues. The company has the potential to benefit from growth in domestic and global AUM. Though higher operating expenses unfavorably impacted T. Rowe Price and the pandemic-induced economic slowdown is a major concern, the bank’s debt-free position and higher return on earnings, as a whole, make us confident of its robust fundamentals.
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, the company carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Performance of Investment Managers
Cohen & Steers’ (CNS - Free Report) first-quarter 2021 adjusted earnings of 79 cents per share lagged the Zacks Consensus Estimate of 81 cents. Nevertheless, the bottom line was 29.5% higher than the year-ago figure.
BlackRock, Inc.’s (BLK - Free Report) first-quarter 2021 adjusted earnings of $7.77 per share outpaced the Zacks Consensus Estimate of $7.64. The figure reflects a rise of 17.7% from the year-ago quarter’s number.
Artisan Partners Asset Management (APAM - Free Report) first-quarter 2021 adjusted earnings came in at $1.13 per share, surpassing the Zacks Consensus Estimate of $1.10. Also, the bottom line was 71% higher than the year-ago quarter figure.
These Stocks Are Poised to Soar Past the Pandemic
The COVID-19 outbreak has shifted consumer behavior dramatically, and a handful of high-tech companies have stepped up to keep America running. Right now, investors in these companies have a shot at serious profits. For example, Zoom jumped 108.5% in less than 4 months while most other stocks were sinking.
Our research shows that 5 cutting-edge stocks could skyrocket from the exponential increase in demand for “stay at home” technologies. This could be one of the biggest buying opportunities of this decade, especially for those who get in early.
See the 5 high-tech stocks now>>