BlackRock Q4 Results Top Estimates, Hikes Dividend

(RTTNews) - Investment manager BlackRock Inc. (BLK) reported Thursday a higher profit in its fourth quarter benefited by growth in assets under management. Adjusted earnings per share and revenues beat analysts' estimates. The company also announced a 15 percent increase in dividend. BlackRock shares increased around 3 percent in pre-market activity.

Chairman and CEO Laurence Fink said, "2013 was a strong year for BlackRock, with 21 percent growth in as adjusted EPS and 13 percent growth in as adjusted operating income, fueled by long-term net inflows of over $117 billion... We saw growth across all of our businesses - Retail, iShares, Institutional and BlackRock Solutions."

For the fourth quarter, the net income attributable to the company increased 22 percent to $841 million from $690 million a year ago. Earnings per share climbed 24 percent to $4.86 from $3.93 in the prior year with a 1 percent drop in share count.

Adjusted net income, which excluded certain items, was $851 million or $4.92 per share, compared to $695 million or $3.96 per share a year earlier.

On average, 20 analysts polled by Thomson Reuters expected the company to report earnings of $4.33 per share for the quarter. Analysts' estimates typically exclude special items.

Quarterly revenues rose 9 percent to $2.78 billion from $2.54 billion in the prior year, while fifteen analysts had consensus revenue estimate of $2.68 billion. The company attributed the higher revenues to growth in markets, long-term net inflows and strength in performance fees and BlackRock Solutions.

In the quarter, investment advisory, administration fees and securities lending generated revenue of $2.3 billion, higher than last year, benefited by growth in long-term average AUM.

Operating margin improved 120 basis points to 40.8 percent, and adjusted operating margin grew 10 basis points to 42.7 percent.

For fiscal 2013, attributable net income climbed 19 percent to $2.93 billion, and earnings per share grew 22 percent to $16.87. Adjusted net income was $2.88 billion or $16.58 per share. Annual revenues grew 9 percent year-over-year to $10.18 billion.

As of December 31, the company's assets under management or AUM totaled $4.324 trillion, a growth of 14 percent from last year's $3.79 trillion. BlackRock managed 61 percent of long-term AUM for investors in the Americas and 39 percent for international clients.

Cash management AUM increased 6 percent, while Advisory AUM decreased 6 percent due to planned portfolio liquidations. The company noted that its long-term net inflows were positive across all regions.

Further, the company said its board approved 15 percent increase in quarterly dividend to $1.93 per share, payable March 24 to shareholders of record on March 7.

Fink added, "Investment performance remains our highest priority, and BlackRock's strong five-year track record in fixed income positions us well for growth in 2014."

BlackRock shares closed Wednesday's trading at $312.75, up $2.23 or 0.72 percent. In pre-market activity, shares gained $8.25 or 2.64 percent further and traded at $321.