BlackRock Earnings Neither Sink Nor Swim
BlackRock (NYSE:BLK) said first-quarter profits were steady, but despite strong inflows into its popular iShares exchange-traded fund business and booming equity markets, revenue at the world’s largest asset manager declined $33 million, or 1 percent, to $2.2 billion.
During the quarter, CEO Laurence Fink rolled out a new global ad campaign around the slogan “Investing for a New World” while cutting operating expenses by $50 million, or 3 percent, to $1.4 billion. Net income rose to $572 million for the quarter, or $3.14 per share, compared to $568 million in the year-ago period.
Investors favored the firm’s indexed funds over actively managed funds, which typically generate higher fees, though not necessarily higher margins for the New York-based BlackRock.
BlackRock had a total of $3.68 trillion worth of assets under management at the end of the quarter, up 5 percent during the quarter and up 1 percent from a year earlier.
Customers withdrew a net $10.3 billion from long-term funds, but excluding a single, previously-announced withdrawal of $36 billion from an indexed fixed-income account, total inflows were $25.7 billion in the quarter. Customers added a net $18.2 billion just in iShares, up 74 percent from the year earlier. Over half that total went into bond ETFs.
Profit per share was up 9 percent, though net income rose less than 1 percent. That’s because BlackRock’s number of fully-diluted shares outstanding declined to 182 million, from 194 million a year earlier.
Excluding costs, the firm earned $3.16 per share, beating analysts’ average projections for EPS of $3.04, according to Thomson Reuters I/B/E/S.
Shares of BlackRock, partially owned by PNC Financial Services Group (NYSE:PNC) and Barclays Plc (NYSE:BCS), are up more than 13 percent this year to date, and climbed nearly 2 percent on Tuesday in anticipation of this morning’s earnings report.