T. Rowe Price Q4 Earnings Miss on Higher Expenses Y/Y, Stock Down 1.8%

Shares of T. Rowe Price Group, Inc. TROW lost 1.8% in the pre-market trading session on lower-than-expected results. Its fourth-quarter 2024 adjusted earnings per share of $2.12 lagged the Zacks Consensus Estimate of $2.23. Nonetheless, the bottom line increased 23.3% year over year.Find the latest earnings estimates and surprises on the Zacks Earnings Calendar.TROW's results were affected by higher expenses. Nonetheless, 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.Net income attributable to T. Rowe Price (on a GAAP basis) was $439.9 million, which increased marginally year over year.In 2024, adjusted earnings of $9.33 per share missed the consensus estimate of $9.42 but rose 22.9% year over year. Net income attributable to T. Rowe Price was $2.1 billion, up 17.4%.TROW’s Revenues & Expenses IncreaseNet revenues in the fourth quarter increased 11.1% year over year to $1.82 billion. However, the top line missed the Zacks Consensus Estimate of $1.88 billion.In 2024, net revenues were $7.09 billion, up 9.8% year over year. However, the top line lagged the Zacks Consensus Estimate of $7.16 billion.Investment advisory fees increased 16.1% year over year to $1.67 billion. Our estimate for investment advisory fees was the same as the actual.Capital allocation-based income plunged significantly to negative $5.2 million from $40.2 million in the prior year quarter. The fall was primarily due to the result of overall lower market returns. Our estimate for capital allocation-based income was $30.6 million.Total operating expenses increased marginally to $1.26 billion in the reported quarter. Our estimate for the metric was $1.33 billion.As of Dec. 31, 2024, T. Rowe Price employed 8,158 associates, up 3.2% year over year.TROW’s AUM Rises, Liquidity Position StrongAs of Dec. 31, 2024, total AUM grew 11.2% year over year to $1.61 trillion. Our projection was $1.71 billion.In the fourth quarter, net market appreciation and income of $5.9 billion positively impacted TROW’s AUM. However, net cash outflows were $8.2 billion.The company had substantial liquidity, including cash and cash equivalents of $2.65 billion as of Dec. 31, 2024, up from $2.07 billion as of Dec 31, 2023. This will enable TROW to keep investing.TROW’s Capital Distribution ActivitiesThe company distributed a total of $355 million to shareholders through common stock dividends and share repurchases in the fourth quarter.Our View on TROWTROW’s solid AUM balance, broadening distribution reach and efforts to diversify business through acquisitions are likely to support top-line growth. Solid liquidity aids sustainable capital distributions. However, an elevated expense base and excessive reliance on investment advisory fees are concerns.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. QuoteCurrently, TROW carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.Performance of Other Asset ManagersLazard Inc.’s LAZ fourth-quarter 2024 adjusted earnings per share of 78 cents topped the Zacks Consensus Estimate of 51 cents. The figure compared favorably with earnings of 66 cents in the year-ago quarter.Lazard’s results were positively impacted by increases in revenues in the financial advisory, asset management and Corporate segments. A decline in expenses was another positive. However, a lower AUM balance acted as a spoilsport.Invesco’s IVZ fourth-quarter 2024 adjusted earnings of 52 cents per share surpassed the Zacks Consensus Estimate of 49 cents. Moreover, the bottom line increased 10.6% from the prior-year quarter.IVZ’s results were primarily aided by a decline in adjusted expenses and higher adjusted net revenues. An increase in the AUM balance on decent inflows was a positive too.5 Stocks Set to DoubleEach was handpicked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2024. While not all picks can be winners, previous recommendations have soared +143.0%, +175.9%, +498.3% and +673.0%.Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.Today, See These 5 Potential Home Runs >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report T. Rowe Price Group, Inc. (TROW): Free Stock Analysis Report Invesco Ltd. (IVZ): Free Stock Analysis Report Lazard, Inc. (LAZ): Free Stock Analysis ReportTo read this article on Zacks.com click here.Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks