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T. Rowe Price stock takes hit as firm reports earnings miss amidst market decline

Shares of T. Rowe Price Group slumped nearly 4 percent Wednesday as the souring stock market at the end of 2018 pinched its earnings for the fourth quarter.

The Baltimore-based money management firm’s stock closed at $89.24 a share, down $3.51.

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T. Rowe reported Wednesday that it earned $351 million, or $1.41 per share, in the three months ended Dec. 31. That’s up from $347 million, or $1.37 a share, a year earlier.

But it fell short of analysts’ consensus estimate of $1.68 per share, according to Zacks.

T. Rowe’s quarterly revenue ticked up to just over $1.3 billion from just under that mark in the fourth quarter of 2017.

The earnings miss appears to be driven by a $151.9 million non-operating loss related mostly to losses on investments.

For all of 2018, T. Rowe earned $1.84 billion, or $7.27 per share, on $5.37 billion in revenue. A year earlier, the company made nearly $1.5 billion, or $5.97 a share, on revenue on $4.85 billion in revenue.

With the declines in the markets, T. Rowe’s assets under management dropped 2.9 percent to $962.3 billion as of Dec. 31, from $991.1 billion a year earlier.

In a statement, William J. Stromberg, T. Rowe’s president and CEO, acknowledged the “more muted” fourth quarter performance “amidst increased market volatility.”

"Overall it was a strong financial year for the firm, with average [assets under management], revenues, and earnings per share up markedly over 2017,” Stromberg said. “We continued to perform well for our clients, with favorable long-term investment performance versus our peers and high client satisfaction across our channels.”

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