T. Rowe Price profit up 18% in 3rd quar­ter, but stock falls

Baltimore Sun - - ELECTION 2016 - By Sarah Gantz sarah.gantz@balt­sun.com twit­ter.com/sarah­gantz

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.

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