The $71.1 million tax-related charge included $18.9 million for “the remeasurement of the firm’s deferred tax assets and liabilities” and $52.2 million for “the mandatory deemed repatriation of foreign sourced net earnings.”
Backing out the added tax costs, T. Rowe said it would have earned $1.52 a share, ahead of the analysts’ consensus estimates of $1.45, according to Zacks Investment Research.
Yet T. Rowe shares dropped 4.3 percent to close Tuesday at $112.51 each. The drop may reflect concern about continued growth in the firm’s operating expenses, but the broader market also was down for the day.
William J. Stromberg, T. Rowe’s president and CEO, noted the role the stock market’s strength played in driving T. Rowe’s strong results.
“This was a very good quarter and year for T. Rowe Price, our clients, and our stockholders,” Stromberg said in a statement. “Strong relative investment performance, robust markets and healthy client activity boosted our assets under management by 22 percent in 2017, including 5 percent in the fourth quarter.”
For the full year, T. Rowe reported income of nearly $1.5 billion, or $5.97 a share, on revenue of $4.8 billion. That’s up from a $1.2 billion, $4.75 a share, profit on revenue of $4.2 billion in 2016.