BlackRock profit beats estimates though asset growth stalls – Reuters

The BlackRock logo is seen outside of its offices in New York City, U.S., October 17, 2016. REUTERS/Brendan McDermid
NEW YORK, Oct 13 (Reuters) – BlackRock Inc (BLK.N) topped third-quarter profit estimates helped by robust performance fees and strong demand for its actively managed and sustainable funds, even as volatile markets hindered the world's largest money manager from growing its assets under management.
Asset managers have benefited from rising global financial markets in recent quarters as investors put money to work, making the most of the post-pandemic economic reopening, driven by progress on vaccinations and strong fiscal and monetary aid.
But with financial markets wobbling during the second quarter – the S&P 500 Index (.SPX) ended the quarter about flat, its worst quarterly performance in six quarters – money managers, BlackRock, included, have had a tougher time growing assets.
BlackRock ended the past quarter with $9.46 trillion in assets under management, up from $7.81 trillion a year earlier, but about flat from the second quarter of this year. Some analysts had expected the investment giant to top $10 trillion in assets.
"It's not time to pop the champagne on the $10 trillion mark yet, that's probably a couple of quarters off," said Kyle Sanders, an analyst with St. Louis-based financial services firm Edward Jones.
Revenue rose 16% to $5.05 billion, helped by technology services revenue growing 13% to $320 million.
Jefferies analysts attributed strength in revenue to robust performance fees which came in at $345 million, compared with Jefferies' estimate of $220 million.
BlackRock's long-term net flows for the quarter stood at $98 billion, helped by continued momentum in its ETFs and active strategies.
The firm logged 9% organic fee growth for the quarter, its sixth straight quarter in excess of their 5% target.
"Organic growth was broad-based, spanning our active platform as well as in each of our ETF product categories," BlackRock CEO Larry Fink said in a statement.
"Demand for ESG (Environmental, Social, and Governance) remains strong, with $31 billion of inflows across our sustainable active and index strategies," Fink said.
Adjusted net income rose 19% to $1.69 billion, or $10.95 per share, in the quarter ended Sept. 30 from a year earlier.
Analysts on average had expected the company to report a profit of $9.35 per share, according to IBES data from Refinitiv.
"This was good quarter for them, but it wasn't a blowout quarter," Edward Jones' Sanders said.
Still, the fund manager's size and reach into every corner of the market, equity, fixed income, multi-asset and alternatives, places it in a favorable position relative to smaller peers, analysts said.
BlackRock's shares are up 15.9% for the year, compared with a 33.1% gain for a Thomson Reuters index that includes more than a dozen of BlackRock's industry rivals in the United States (.TRXFLDUSPINVM).
BlackRock shares were up about 1% in trading before the bell on Wednesday.
Our Standards: The Thomson Reuters Trust Principles.
Subscribe for our daily curated newsletter to receive the latest exclusive Reuters coverage delivered to your inbox.
Big U.S. banks' wealth management businesses put in another stellar performance in the third quarter, buoyed by record levels of new money flowing into accounts and surging demand from clients to borrow against their investment portfolios.
Reuters, the news and media division of Thomson Reuters, is the world’s largest multimedia news provider, reaching billions of people worldwide every day. Reuters provides business, financial, national and international news to professionals via desktop terminals, the world's media organizations, industry events and directly to consumers.
Build the strongest argument relying on authoritative content, attorney-editor expertise, and industry defining technology.
The most comprehensive solution to manage all your complex and ever-expanding tax and compliance needs.
The industry leader for online information for tax, accounting and finance professionals.
Information, analytics and exclusive news on financial markets – delivered in an intuitive desktop and mobile interface.
Access to real-time, reference, and non-real time data in the cloud to power your enterprise.
Screen for heightened risk individual and entities globally to help uncover hidden risks in business relationships and human networks.
All quotes delayed a minimum of 15 minutes. See here for a complete list of exchanges and delays.
© 2021 Reuters. All rights reserved

source