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T. Rowe Met 3Q17 Earnings Estimates but Missed Revenue Estimates

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EPS estimates

T. Rowe Price Group (TROW) reported its earnings for 3Q17 on October 26, 2017. The company’s reported earnings per share (or EPS) exceeded Wall Street analyst estimates. The company reported EPS of $1.45 in 3Q17, while the analyst estimate was $1.42.

However, T. Rowe failed to meet analysts’ expectations on revenues. The company reported revenues of $1.22 billion in 3Q17, while analysts were expecting $1.23 billion. In 3Q17, the company witnessed a substantial YoY rise in average assets under management (or AUM) of 15.4%. T. Rowe reported AUM of $927.4 billion in 3Q17 compared to $803.6 billion in 3Q16.

T. Rowe has managed to post a return on equity of 29.5% on a last-12-month (or LTM) basis. On the other hand, peers (XLF) like Invesco Limited (IVZ), Federated Investors (FII), and BlackRock (BLK) have posted a return on equity of 11.8%, 32.3%, and 11.9%, respectively, on an LTM basis.

Net operating income

T. Rowe Price Group saw a rise in its net operating income in 3Q17 on a YoY basis. It reported net operating income of $548.5 million in 3Q17 compared to $475.7 million in 3Q16. This YoY rise was mainly due to the rise in net revenues.

T. Rowe witnessed a decline in the total non-operating income in 3Q17 compared to 3Q16. It reported total non-operating income of $67.3 million in 3Q17 compared to $88.3 million in 3Q16. This YoY decline was mainly due to a fall in investment income related to consolidated sponsored investment portfolios.

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