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T. Rowe Price (TROW) Q1 Earnings Miss, Revenues Rise Y/Y

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T. Rowe Price Group, Inc. (TROW - Free Report) has delivered first-quarter 2022 adjusted earnings per share of $2.62, which missed the Zacks Consensus Estimate of $2.76. The reported figure also declined 13% year over year.

Results were supported by higher revenues, backed by an upsurge in administrative, distribution and servicing fees. However, assets under management (AUM) declined, whereas escalating expenses created a headwind.

Net income attributable to T. Rowe Price was $567.9 million compared with the $749.4 million recorded in the prior-year quarter.

Revenues Improve, Expenses Rise

Net revenues in the first quarter increased 2% to $1.86 billion from the year-ago quarter’s figure. The upswing primarily resulted from higher administrative, distribution and servicing fees, offset by lower investment advisory fees. The reported figure also surpassed the Zacks Consensus Estimate of $1.85 billion.

Investment advisory fees fell 1.5% year over year to $1.66 billion. Additionally, administrative, distribution and servicing fees rose 12.6% to $156.5 million.

Total adjusted operating expenses flared up 14.3% year over year to $1.03 billion in the reported quarter.

As of Mar 31, 2022, T. Rowe Price employed 7,573 associates, up 0.6% from the 2021 level.

AUM Down, Liquidity Position Strengthens

As of Mar 31, 2022, total AUM fell 8.1% year over year to $1.55 trillion. In the March-end quarter, net market depreciation of $130.7 billion and net cash outflow of $5.3 billion reduced TROW’s AUM.

T. Rowe Price has substantial liquidity, including cash and cash investments of $4.49 billion as of Mar 31, 2022, up from $4.26 billion as of Dec 31, 2021. This will enable TROW to keep investing.

Capital-Deployment Activity Robust

In the reported quarter, T. Rowe Price repurchased 2.1 million shares of its common stock for $320.1 million.

Our Viewpoint

T. Rowe Price put up a decent show in the March-end quarter on revenue growth. Volatile markets affected its performance.

TROW has the potential to benefit from growth in domestic and global AUM, while higher operating expenses are concerning.

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

 

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, T. Rowe Price carries a Zacks Rank #4 (Sell).

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) first-quarter 2022 adjusted earnings of $9.52 per share outpaced the Zacks Consensus Estimate of $8.92. The figure reflects a rise of 18.4% from the year-ago quarter.

BLK’s results benefited from an improvement in revenues, partly offset by higher expenses. Moreover, long-term net inflows supported growth in the AUM balance.

Invesco’s (IVZ - Free Report) first-quarter 2022 adjusted earnings of 56 cents per share missed the Zacks Consensus Estimate of 61 cents. The bottom line declined 17.6% from the prior-year quarter.

Results were adversely impacted by a rise in operating expenses. However, improvement in revenues and solid growth in the AUM balance act as tailwinds.

SEI Investments Co.’s (SEIC - Free Report) first-quarter 2022 earnings of $1.36 per share were in line with the Zacks Consensus Estimate. The bottom line reflects a 53% jump from the prior-year quarter. The reported quarter comprised a one-time early termination fee of $88 million or 47 cents per share, which was included in information processing and software servicing fees.

SEIC’s Results were aided by revenue growth and an increase in the AUM balance. These were offset by a rise in expenses.