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NEW YORK - T. Rowe Price Group (NASDAQ:TROW) reported stronger-than-expected third quarter results on Friday, with adjusted earnings and revenue surpassing analyst estimates.
The company’s shares were up 2.57% in pre-market trading after the results.
The investment management firm posted adjusted earnings per share of $2.81 for the third quarter, significantly exceeding the analyst consensus of $2.52. Revenue came in at $1.89 billion, slightly above the $1.88 billion expected by analysts. The company’s assets under management (AUM) reached a period-high of $1.77 trillion as of September 30, representing an 8.4% increase from $1.63 trillion in the same quarter last year.
"We reached an end of period high with $1.77 trillion in AUM as of September 30 and created an opportunity to bring innovative new solutions to market for our clients with our recently announced strategic collaboration with Goldman Sachs," said Rob Sharps, chair, CEO, and president of T. Rowe Price.
Despite the positive results, the company reported net client outflows of $7.9 billion during the quarter. Investment advisory fees, which make up the bulk of the firm’s revenue, increased 4.4% YoY to $1.7 billion, driven by higher average assets under management, which grew 8.4% compared to the same period last year.
The firm’s investment advisory annualized effective fee rate was 39.1 basis points in Q3, down from 40.7 basis points in Q3 2024, primarily due to client flows shifting toward lower-fee strategies and products.
T. Rowe Price returned $442 million to stockholders during the quarter through its recurring quarterly dividend and stock repurchases. The company also recorded a $28.5 million restructuring charge related to workforce reductions as part of its ongoing plan to reduce expense growth and realign resources.
The company’s multi-asset investment division, which provides advisory solutions including strategic asset allocation design and portfolio rebalancing services, managed $617.7 billion in assets at the end of the quarter, up 10.2% from the same period last year.
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