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 Group, Inc. (TROW - Free Report) reported second-quarter 2023 adjusted earnings per share of $2.02, which outpaced the Zacks Consensus Estimate of $1.71. The bottom line increased 12.8% year over year.
TROW's net revenues were supported by a rise in assets under management (AUM). Further, appreciation in cash and cash equivalents will help the company to continue investing. However, a rise in expenses in the quarter under discussion hinders bottom-line growth.
Net income attributable to T. Rowe Price was $476.4 million, up 40.3% from the prior-year quarter.
Revenues & Expenses Rise
Net revenues in the second quarter increased 6.4% to $1.61 billion from the year-ago quarter. The top line surpassed the Zacks Consensus Estimate of $1.58 billion.
However, investment advisory fees fell 4.4% to $1.43 billion. Administrative, distribution and servicing fees decreased 1.3% to $140.7 million.
On the flip side, total operating expenses increased 27.5% to $1.08 billion in the reported quarter. Our estimate for the metric was $1.07 billion.
As of Jun 30, 2023, T. Rowe Price employed 7,903 associates, up 1.7% from the year-ago quarter.
AUM Increases, Liquidity Position Strong
As of Jun 30, 2023, total AUM grew 6.8% year over year to $1.4 trillion. Our projection was $1.3 billion.
In the second quarter, net market appreciation and gains of $56.6 billion positively impacted TROW’s AUM. However, these were partially offset by net cash outflows of $19.5 billion
The company had substantial liquidity including cash and cash equivalents of $2.25 billion as of Jun 30, 2023, up from $2.09 billion as of Mar 31, 2023. This will enable TROW to keep investing.
Our View
TROW’s diversified business model, focus on enhancing investment capabilities, broadening distribution reach and improving client partnerships will aid long-term growth. An escalation in AUM also acted as a positive. However, growing dependence on investment advisory fees is concerning, as market fluctuations and a sudden slowdown in overall business activities may hurt this revenue source.
T. Rowe Price Group, Inc. Price, Consensus and EPS Surprise
BlackRock, Inc.’s (BLK - Free Report) second-quarter 2023 adjusted earnings of $9.28 per share handily surpassed the Zacks Consensus Estimate of $8.47. However, the figure reflected a climb of 26% from the year-ago quarter.
A decline in expenses and higher non-operating income aided BLK’s results. Further, AUM balance witnessed improvement. However, lower revenues were concerns.
SEI Investments Co.’s (SEIC - Free Report) second-quarter 2023 earnings of 89 cents per share beat the Zacks Consensus Estimate of 85 cents. The bottom line reflected a rise of 10% from the prior-year quarter.
Results of SEIC were benefited from higher revenues and an increase in AUM balance. However, rising expenses were undermining factors.
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 Beat Estimates, AUM Rises Y/Y
T. Rowe Price Group, Inc. (TROW - Free Report) reported second-quarter 2023 adjusted earnings per share of $2.02, which outpaced the Zacks Consensus Estimate of $1.71. The bottom line increased 12.8% year over year.
TROW's net revenues were supported by a rise in assets under management (AUM). Further, appreciation in cash and cash equivalents will help the company to continue investing. However, a rise in expenses in the quarter under discussion hinders bottom-line growth.
Net income attributable to T. Rowe Price was $476.4 million, up 40.3% from the prior-year quarter.
Revenues & Expenses Rise
Net revenues in the second quarter increased 6.4% to $1.61 billion from the year-ago quarter. The top line surpassed the Zacks Consensus Estimate of $1.58 billion.
However, investment advisory fees fell 4.4% to $1.43 billion. Administrative, distribution and servicing fees decreased 1.3% to $140.7 million.
On the flip side, total operating expenses increased 27.5% to $1.08 billion in the reported quarter. Our estimate for the metric was $1.07 billion.
As of Jun 30, 2023, T. Rowe Price employed 7,903 associates, up 1.7% from the year-ago quarter.
AUM Increases, Liquidity Position Strong
As of Jun 30, 2023, total AUM grew 6.8% year over year to $1.4 trillion. Our projection was $1.3 billion.
In the second quarter, net market appreciation and gains of $56.6 billion positively impacted TROW’s AUM. However, these were partially offset by net cash outflows of $19.5 billion
The company had substantial liquidity including cash and cash equivalents of $2.25 billion as of Jun 30, 2023, up from $2.09 billion as of Mar 31, 2023. This will enable TROW to keep investing.
Our View
TROW’s diversified business model, focus on enhancing investment capabilities, broadening distribution reach and improving client partnerships will aid long-term growth. An escalation in AUM also acted as a positive. However, growing dependence on investment advisory fees is concerning, as market fluctuations and a sudden slowdown in overall business activities may hurt this revenue source.
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
T. Rowe Price carries a Zacks Rank #2 (Buy). 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 2023 adjusted earnings of $9.28 per share handily surpassed the Zacks Consensus Estimate of $8.47. However, the figure reflected a climb of 26% from the year-ago quarter.
A decline in expenses and higher non-operating income aided BLK’s results. Further, AUM balance witnessed improvement. However, lower revenues were concerns.
SEI Investments Co.’s (SEIC - Free Report) second-quarter 2023 earnings of 89 cents per share beat the Zacks Consensus Estimate of 85 cents. The bottom line reflected a rise of 10% from the prior-year quarter.
Results of SEIC were benefited from higher revenues and an increase in AUM balance. However, rising expenses were undermining factors.