T. Rowe Price beats on earnings, misses revenue expectations

Published 01/08/2025, 12:32
 T. Rowe Price beats on earnings, misses revenue expectations

BALTIMORE - T. Rowe Price Group (NASDAQ:TROW) reported second-quarter earnings that exceeded analyst expectations on Friday, despite facing continued client outflows and slightly missing revenue forecasts.

The investment management firm’s shares edged down 0.44% in pre-market trading following the announcement.

The Baltimore-based asset manager posted adjusted earnings per share of $2.24 for the second quarter, surpassing the analyst consensus of $2.13. However, revenue came in at $1.72 billion, slightly below the $1.73 billion analysts had expected and down 0.6% from the same period last year.

T. Rowe Price reported net client outflows of $14.9 billion during the quarter, highlighting ongoing challenges in retaining assets. Despite these outflows, the firm’s assets under management rose to $1.68 trillion at quarter-end, up 6.9% from $1.57 trillion a year earlier, benefiting from market appreciation of $125.4 billion during the quarter.

"We are building momentum for the long-term—growing our ETF business, leveraging partnerships to extend our reach, and expanding our leadership in retirement," said Rob Sharps, chair, CEO, and president. "We have developed a broad and ongoing plan to reduce our expense growth over time while continuing to invest in capabilities and client reach."

Operating expenses increased 6.5% YoY to $1.25 billion, while net operating income fell 15.3% to $478.3 million compared to the same quarter last year. The company’s investment advisory annualized effective fee rate declined to 39.6 basis points from 41.1 basis points a year ago, reflecting shifts toward lower-fee asset classes and products.

T. Rowe Price returned $395 million to stockholders through dividends and share repurchases during the quarter. The firm’s multi-asset strategies saw net inflows of $0.9 billion, while equity strategies experienced outflows of $18.1 billion.

"While we acknowledge the short-term headwinds, we are confident we are positioned to take advantage of the opportunities ahead," Sharps added.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.

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