T. Rowe Price Group Beats Estimates on Top and Bottom Lines

Seth Jayson, The Motley Fool
Updated

T. Rowe Price Group (NAS: TROW) reported earnings on Jan. 27. Here are the numbers you need to know.

The 10-second takeaway
For the quarter ended Dec. 31 (Q4), T. Rowe Price Group beat slightly on revenues and beat expectations on earnings per share.

Compared to the prior-year quarter, revenue grew, and GAAP earnings per share contracted.

Gross margins grew, operating margins dropped, and net margins dropped.

Revenue details
T. Rowe Price Group reported revenue of $671.6 million. The 12 analysts polled by S&P Capital IQ expected a top line of $664.6 million. Sales were 3.6% higher than the prior-year quarter's $647.5 million.

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Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions.

EPS details
Non-GAAP EPS came in at $0.73. The 21 earnings estimates compiled by S&P Capital IQ averaged $0.69 per share on the same basis. GAAP EPS of $0.71 for Q4 were 1% higher than the prior-year quarter's $0.72 per share.

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Source: S&P Capital IQ. Quarterly periods. Figures may be non-GAAP to maintain comparability with estimates.

Margin details
For the quarter, gross margin was 97%, 3,150 basis points better than the prior-year quarter. Operating margin was 43.7%, 260 basis points worse than the prior-year quarter. Net margin was 28.1%, 150 basis points worse than the prior-year quarter.

Looking ahead
Next quarter's average estimate for revenue is $687.3 million. On the bottom line, the average EPS estimate is $0.73.

Next year's average estimate for revenue is $2.86 billion. The average EPS estimate is $3.13.

Investor sentiment
The stock has a four-star rating (out of five) at Motley Fool CAPS, with 372 members out of 396 rating the stock outperform, and 24 members rating it underperform. Among 119 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 112 give T. Rowe Price Group a green thumbs-up, and seven give it a red thumbs-down.

Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on T. Rowe Price Group is hold, with an average price target of $56.76.

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At the time thisarticle was published Seth Jayson had no position in any company mentioned here at the time of publication. You can view his stock holdings here. He is co-advisor ofMotley Fool Hidden Gems, which provides new small-cap ideas every month, backed by a real-money portfolio. The Motley Fool owns shares of T. Rowe Price Group. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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