BlackRock Q2 Results Top Estimates

(RTTNews) - Publicly owned investment manager BlackRock Inc. (BLK) Wednesday said its second-quarter profit increased from the prior year, along with a rise in revenues. Both earnings and revenues topped Wall Street estimates. Assets Under Management at the end of the period rose 3 percent from last year.

Laurence Fink, chairman and CEO of BlackRock, said, "Although continued market volatility impacted asset flows in the second quarter, BlackRock's diversified business model drove strong financial results, with revenue up 5% and operating income up 10% year-over-year."

Net income attributable to the company rose to $819 million or $4.84 per share from $808 million or $4.72 per share in the prior year.

Adjusted net income was $4.96 per share, while it totaled $4.89 per share in the comparable quarter last year.

On average, 18 analysts polled by Thomson Reuters expected the company to report profit per share of $4.80 for the quarter. Analysts' estimates typically exclude special items.

Operating income climbed 10 percent to $1.24 billion, and operating margin improved 220 basis points to 42.6 percent.

Revenue increased 5 percent to $2.91 billion from $2.78 billion last year, driven by growth in base fees. Analysts were looking for revenue of $2.85 billion for the quarter.

Investment advisory, administration fees and securities lending revenue improved to $2.534 billion from $2.434 billion. Investment advisory performance fees advanced to $136 million from $115 million, and BlackRock Solutions and advisory revenue grew to $161 million from $146 million.

Assets Under Management at the end of the period rose 3 percent to $4.72 billion from $4.59 billion. In the Long-Term business, cash management AUM decreased 7 percent to $271.5 billion, driven by seasonal outflows.

Long-term net inflows were $17.5 billion, and long-term net outflows totaled $7.3 billion. The company noted that $23.6 billion of active and iShares net inflows drove organic base fee growth, offsetting the impact of $30.9 billion of low-fee non-ETF index net outflows.

Fink added that a a desire to reallocate and/or address cash needs drove ten of its largest clients to redeem over $40 billion of institutional index equity assets.

"However, those same clients reinvested across BlackRock's active equity and fixed income, multi-asset and alternatives strategies, resulting in a positive net revenue impact for the firm," he added.

BLK slipped 0.4 percent on Tuesday to settle at $342.73.