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T. Rowe Price Group profit climbs 20 percent, reflecting lower tax rate

T. Rowe Price Group's second-quarter profit climbed 20 percent as the effect of the cut in the federal corporate tax rate continued to boost its bottom line.

The Baltimore based money management firm reported Wednesday that it earned $448.9 million in the three months ended June 30, up from $373.9 million in the same quarter of 2017.

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Earnings per share were $1.77 compared with $1.50 a year earlier.

The news goosed the company’s stock price, with shares closing up 2.9 percent at $124.81 each in Wednesday trading.

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The company's revenue, largely from investment advisory fees, rose 13 percent to nearly $1.35 billion in the recent quarter.

T. Rowe Price reported $1.04 trillion in assets under management as of June 30, up 2.9 percent from March 31.

“In a second quarter where attractive U.S. equity returns proved the exception to volatile global markets, T. Rowe Price continued to perform well,” said William J. Stromberg, the company’s president and CEO, in a statement. “Our assets under management increased nearly 3%, and we were pleased with the continued strength and diversification of net inflows across asset classes, client segments, and geographies.”

T. Rowe Price Group’s earnings surged 17.6 percent in the first quarter of 2018 to $453.7 million, driven partly by the big reduction in corporate tax rate.

The company reported that its effective tax rate for 2018’s second quarter fell to 26.9 percent from 37.1 percent in a year earlier. Under the Trump administration tax cuts, the federal corporate rate was reduced to 21 percent from 35 percent on Jan. 1, which has boosted U.S. corporate earnings.

T. Rowe Price said it did incur one-time tax-related charges of $20.8 million and $7.9 million during the quarter as it adjusted its deferred tax asset and liability re-measurement estimates for federal and state taxes.

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