We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
T. Rowe Price (TROW) Q2 Earnings Miss Estimates, AUM Down Y/Y
Read MoreHide Full Article
T. Rowe Price Group, Inc. (TROW - Free Report) reported second-quarter 2022 adjusted earnings per share of 1.79, which missed the Zacks Consensus Estimate of $2.24. The reported figure also declined 45.9% year over year.
The company's net revenues were affected by the decline in assets under management (AUM) and the loss of capital allocation income. Nonetheless, appreciation in cash and cash equivalent will help the company to continue investing.
Net income attributable to T. Rowe Price was $339.6 million compared with the $815.7 million recorded in the prior-year quarter.
Revenues Decrease, Expenses Dip
Net revenues in the second quarter decreased 21.6% to $1.51 billion from the year-ago quarter’s figure. The decline was mainly due to a fall in investment advisory fees and loss of capital allocation-based income. The reported figure also missed the Zacks Consensus Estimate of $1.71 billion.
Investment advisory fees fell 16% year over year to $1.49 billion. Nonetheless, administrative, distribution and servicing fees marginally increased to $142.6 million.
Total adjusted operating expenses declined 3% year over year to $937.9 million in the reported quarter.
As of Jun 30, 2022, T. Rowe Price employed 7,771 associates, up 3.2% from the 2021 level.
AUM Down, Liquidity Position Strong
As of Jun 30, 2022, total AUM fell 19.3% year over year to $1.31 trillion. In the June quarter, net market depreciation and net distributions not reinvested of $227.4 billion and net cash outflow of $14.7 billion reduced TROW’s AUM.
T. Rowe Price had substantial liquidity, including cash and cash equivalent of $2.12 billion as of Jun 30, 2022, up from $1.52 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 1.7 million shares of its common stock for $199.4 million.
Our Viewpoint
The company has managed to lower its expenses. Management continues to focus on its strategic priorities to improve the business for long-term success. However, the overall performance of the company was affected by volatile markets.
T. Rowe Price Group, Inc. Price, Consensus and EPS Surprise
BlackRock, Inc.’s (BLK - Free Report) second-quarter 2022 adjusted earnings of $7.36 per share missed the Zacks Consensus Estimate of $8.33. The figure reflects a decrease of 30% from the year-ago quarter.
BLK’s results were adversely impacted by an unfavorable operating backdrop, leading to lower revenues and AUM balance. A modest decline in expenses was a tailwind.
SEI Investments Co.’s (SEIC - Free Report) second-quarter 2022 earnings of 81 cents per share lagged the Zacks Consensus Estimate by a penny. The bottom line reflected a decline of 12.9% from the prior-year quarter.
SEIC’s results were hurt by a rise in expenses. However, growth in revenues and an increase in the AUM balance were tailwinds.
Unique Zacks Analysis of Your Chosen Ticker
Pick one free report - opportunity may be withdrawn at any time
Image: Bigstock
T. Rowe Price (TROW) Q2 Earnings Miss Estimates, AUM Down Y/Y
T. Rowe Price Group, Inc. (TROW - Free Report) reported second-quarter 2022 adjusted earnings per share of 1.79, which missed the Zacks Consensus Estimate of $2.24. The reported figure also declined 45.9% year over year.
The company's net revenues were affected by the decline in assets under management (AUM) and the loss of capital allocation income. Nonetheless, appreciation in cash and cash equivalent will help the company to continue investing.
Net income attributable to T. Rowe Price was $339.6 million compared with the $815.7 million recorded in the prior-year quarter.
Revenues Decrease, Expenses Dip
Net revenues in the second quarter decreased 21.6% to $1.51 billion from the year-ago quarter’s figure. The decline was mainly due to a fall in investment advisory fees and loss of capital allocation-based income. The reported figure also missed the Zacks Consensus Estimate of $1.71 billion.
Investment advisory fees fell 16% year over year to $1.49 billion. Nonetheless, administrative, distribution and servicing fees marginally increased to $142.6 million.
Total adjusted operating expenses declined 3% year over year to $937.9 million in the reported quarter.
As of Jun 30, 2022, T. Rowe Price employed 7,771 associates, up 3.2% from the 2021 level.
AUM Down, Liquidity Position Strong
As of Jun 30, 2022, total AUM fell 19.3% year over year to $1.31 trillion. In the June quarter, net market depreciation and net distributions not reinvested of $227.4 billion and net cash outflow of $14.7 billion reduced TROW’s AUM.
T. Rowe Price had substantial liquidity, including cash and cash equivalent of $2.12 billion as of Jun 30, 2022, up from $1.52 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 1.7 million shares of its common stock for $199.4 million.
Our Viewpoint
The company has managed to lower its expenses. Management continues to focus on its strategic priorities to improve the business for long-term success. However, the overall performance of the company was affected by volatile markets.
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) second-quarter 2022 adjusted earnings of $7.36 per share missed the Zacks Consensus Estimate of $8.33. The figure reflects a decrease of 30% from the year-ago quarter.
BLK’s results were adversely impacted by an unfavorable operating backdrop, leading to lower revenues and AUM balance. A modest decline in expenses was a tailwind.
SEI Investments Co.’s (SEIC - Free Report) second-quarter 2022 earnings of 81 cents per share lagged the Zacks Consensus Estimate by a penny. The bottom line reflected a decline of 12.9% from the prior-year quarter.
SEIC’s results were hurt by a rise in expenses. However, growth in revenues and an increase in the AUM balance were tailwinds.