=T. Rowe Price (TROW) reported earnings on Thur 26 Jan 2017 (b/o)

T. Rowe Price beats by $0.17, reports revs in-line :

• Reports Q4 (Dec) earnings of $1.50 per share, $0.17 better than the Capital IQ Consensus of $1.33; revenues rose 3.7% year/year to $1.09 bln vs the $1.1 bln Capital IQ Consensus.
• Assets under management decreased $2.1 billion in the fourth quarter of 2016, but increased $47.7 billion for the full year of 2016 to $810.8 billion at December 31, 2016.
• Management Commentary:
  • "U.S. stocks advanced sharply in the fourth quarter of 2016, lifting major indexes to record highs and resulting in strong full-year gains for many investors. Economic growth finished 2016 on a strong note and investors grew more optimistic that the incoming administration and Congress will succeed in reducing regulations and taxes. International equity markets delivered positive but less strong results, held back by a strengthening U.S. dollar. Fixed income returns suffered in the quarter as interest rates rose following the U.S. elections. Full year returns, though, were solid, led by high yield and emerging market bonds.
  • "We experienced net cash outflows for the fourth quarter and the year, largely as a result of clients reallocating from active U.S. equity strategies to passive products. The trend to passive has been persistent and has accelerated in recent years. We cannot predict when it will reach a new equilibrium. Over the long term though, we expect well-executed active management to play an important ongoing role for investors and we are reinvesting in our company with the objective of sustaining the strong investment and service results we have historically achieved for our clients.
  • "Our previously announced initiatives in product, distribution, and technology are moving ahead as planned. We are expanding our asset allocation business to meet the growing demands of global solution-seeking investors. We are continuing the buildout of our distribution capabilities to capitalize on opportunities in key markets outside of the U.S., as well as with intermediaries in the U.S., where regulatory changes are creating opportunities. And we are investing to enhance our clients' technology-enabled experiences across all of our businesses. For example, our new T. Rowe Price ActivePlus Portfolios discretionary advice service was beta tested this past quarter and is formally launching to clients in early 2017.