T. Rowe Price profit up 18% in 3rd quarter, but stock falls
T. Rowe Price Group’s third-quarter profit rose 18 percent compared to a year ago, as assets under management grew to nearly $813 billion.
On Thursday, the Baltimore-based money manager reported income of $327.8 million in the July-to-September period, up from $277.1 million the same quarter last year. Earnings per share jumped 21 percent, to $1.28.
Yet T. Rowe shares slipped 3.8 percent in Thursday’s trading to close at $63.83 each, a drop attributed to the company’s narrowly missing analysts’ estimates. Adjusted for nonrecurring gains, its pershare earnings were $1.17 each, while analysts polled by Zacks Investment Service forecast $1.20.
In an interview Thursday morning, T. Rowe President and CEO William J. Stromberg said he was pleased with the firm’s performance in the most recent quarter and expressed confidence in the company’s outlook.
Revenue rose 4 percent to just under $1.1 billion and assets under management reached $812.9 billion as of Sept. 30, a 12 percent increase from a year earlier.
“I think it was a really solid quarter in a tough environment for active managers,” Stromberg said.
Passive investing, a strategy that involves minimal buying and selling, is becoming more popular, posing a challenge for firms like T. Rowe with reputations for their active-management portfolios, Stromberg said.