Investment manager BlackRock, Inc. (BLK) reported Tuesday a higher profit for its first quarter, above market estimates, as revenues were benefited by growth in markets, long-dated net new business and higher performance fees.
BlackRock Chairman and CEO Laurence Fink said, "Our strong first quarter financial results, with revenue up 9 percent and EPS up 16 percent year-over-year, once again demonstrate the strength of our diversified business model. Our $39.4 billion in long-dated net new business for the quarter is indicative of positive momentum across all client channels and was driven by the strategic themes we continue to focus on: ETFs, retirement, income, multi-asset class products, and alternatives."
In its first quarter, net income attributable to the company increased 10 percent to $632 million from $572 million in the same quarter last year. Earnings per share climbed 15 percent to $3.62 from prior year's $3.14, reflecting 4 percent lower share count.
Adjusted net income, which excluded certain items, grew 11 percent to $637 million and adjusted earnings per share climbed 16 percent to $3.65 from $3.16 last year. On average, 20 analysts polled by Thomson Reuters expected the company to report earnings of $3.58 per share for the quarter. Analysts' estimates typically exclude special items.
Total revenues for the quarter rose 9 percent to $2.45 billion from $2.25 billion in the prior year quarter. Sixteen analysts had consensus revenue estimate of $2.44 billion for the quarter. The company noted that investment advisory, administration fees and securities lending revenue, performance fees, as well as BlackRock Solutions and advisory revenue all increased from last year.
Sequentially, revenues fell 4 percent on fewer revenue days and seasonally lower performance fees.
In the quarter, adjusted operating profit increased 12 percent and operating margin improved 140 basis points from last year to 40 percent.
The company's assets under management as of March 31 was $3.936 trillion, 7 percent higher than last year. Cash management AUM decreased 1 percent to $261.3 billion, while Advisory AUM increased 1 percent to $45.8 billion due to the addition of Financial Markets Advisory portfolio liquidation mandates.
BlackRock shares closed Monday's trading at $253.86, down $9.27 or 3.52 percent.
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