T. Rowe Price Group, Inc. ( TROW Quick Quote 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.
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.
Currently, T. Rowe Price carries a Zacks Rank #4 (Sell).
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