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T. Rowe Price Q4 Earnings Beat Estimates

T. Rowe Price Group, Inc. (TROW) on Tuesday reported a nearly 9 percent decline in net profit for the fourth quarter from last year, reflecting a one-time charge related to the enactment of U.S. tax reform. However, both revenue and adjusted earnings per share for the quarter beat analysts' estimates.

Fourth-quarter net income attributable to common stockholders of the company declined to $339.2 million or $1.37 per share from $371.4 million or $1.50 per share in the year-ago period.

The company's income tax provision for the latest quarter included a non-recurring charge of $71.1 million to reflect the estimated effect of the U.S. tax law changes enacted on December 22, 2017.

The charge includes $18.9 million for the remeasurement of the company's deferred tax assets and liabilities, and a $52.2 million tax liability for the mandatory deemed repatriation of foreign sourced net earnings.

Excluding items, adjusted earnings for the quarter were $1.52 per share, compared to $1.21 in the same period last year.

On average, analysts polled by Thomson Reuters expected the company to report earnings of $1.48 per share for the quarter. Analysts' estimates typically exclude special items.

Net revenues for the quarter grew 17.9 percent to $1.29 billion from $1.09 billion in the year-ago period. Analysts had a consensus revenue estimate of $1.27 billion.

The company's assets under management or AUM increased 22.2 percent to $991.1 billion at December 31, 2017 from $810.8 billion a year ago.

Looking ahead, T. Rowe estimates that the reduction in the U.S. corporate tax rate from 35 percent to 21 percent in 2018, combined with other miscellaneous tax changes that effect certain tax deductions, will reduce its 2018 effective tax rate to a range of 24.0 percent to 27.0 percent.

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