T. Rowe Price Q3 2024 Financial Results

Announcement Date: October 24, 2024
T. Rowe Price (NASDAQ: TROW) has announced its financial results for the third quarter of 2024. The company reported a significant growth in assets under management (AUM) and adjusted earnings per share (EPS).

Key Financial Highlights

• AUM: Increased to $1.63 trillion, marking a 3.9% rise from the previous quarter.
• Net Outflows: Experienced $12.2 billion in net outflows.
• Adjusted EPS: Reported at $2.57, reflecting an 18% increase compared to the same period last year.

CEO and CFO Comments

CEO Rob Sharps highlighted the growth in the firm's active ETF franchise and innovative retirement solutions. CFO Jen Dardis pointed out the strong performance of the target date franchise and the share repurchase of $71 million.

Key Takeaways

• T. Rowe Price is anticipating a reduction in net outflows for 2024, aiming to halve levels compared to 2023 (excluding significant sub-advised variable annuity terminations).
• The strategy includes returning over $1.1 billion to shareholders within the first nine months.
• Focus areas for the company include retirement and alternative strategies while managing operational expenses.

Company Outlook

• Strategic investments are planned for growth until 2025, targeting expense growth to align with revenue growth at 6% to 8%.

Performance Challenges and Opportunities

• Despite net outflows being a disappointment, there were positive inflows in the target date franchise ($3.6 billion) and nearly $1 billion in ETF inflows.
• The company recognizes ongoing performance challenges beginning in Q4 2021.

Q&A Highlights

• Executives expressed confidence in the strength of their research strategy and emphasized expense management aligned with revenue momentum for the upcoming year.

Investing Pro Insights

• T. Rowe Price maintains a market capitalization of $24.45 billion and has paid dividends for 39 consecutive years, with a current yield of 4.51%.
• Analysts have revised earnings forecasts upwards in light of the firm’s strong financial performance and management outlook.
• The company presents an attractive entry point for investors given its valuation and growth potential in strategic investment offerings.

Closing Remarks

The executives are optimistic about the structure of their products and performance initiatives intended to capitalize on market opportunities and improve performance metrics, despite recent outflows and other challenges.