Last updated on July 29th, 2024 at 12:34 pm
BlackRock announced second-quarter earnings on Monday that beat Wall Street expectations and showed the profit up 11% from a year ago.
That brings the firm’s total client assets under management to a record $10.64 trillion in quarter-end balances, up 13% from year-ago levels.
However, the world’s biggest asset manager posted quarterly adjusted net income of $1.55 billion ($0.98 per share),
compared with analysts’ estimates for earnings excluding certain items to be $1.47 billion($0 That worked out to $10.36 of adjusted per-share earnings, compared with a consensus prediction by analysts surveyed by FactSet that the company would post EPS of $9.96.
“BlackRock is acting upon the most pervasive maturing opportunity we have observed in time, together with within personal marketplaces, Aladdin & full portfolio solutions spanning ETFs and active,”
Black Chuck CEO Larry Fink talked about from an account on Monday.
Fink said growth was led by private markets, retail active fixed income, and flows into its exchange-traded funds “which had their best start to a year on record.”
BlackRock got $4.8 billion worth of revenue The analysts had forecast a revenue for the period of $4.85 billion.
BlackRock is the busiest mount of Wall Street, as investors track how much cash is going into its myriad funds. Analysts had been expecting the company to report long-term net fund flows of $88.8 billion a year, They came in at just $51 billion instead For the full second quarter, overall net flows of $82 billion also fell below estimates as analysts had predicted inflows of $114.6 billion.
New York-based additional income came in at $1.4 billion, or balanced EPS of 9.28 on revenue of $4.46B in the second quarter of 2023
Shares rose 1.2% before the market opened This year, its shares have risen 2%, compared with the S&P 500’s gain of 18% to a record.
This is breaking news. See a preview of BlackRock’s earnings below and look for more coverage later.
BlackRock, which is already the world’s largest money manager, will only get bigger on those two fronts in the coming years if analysts are to be believed.
Wall Street expects the New York-based company to announce more record assets under management (AUM) as it posts results for the second quarter on Monday, benefiting from both rising markets and strong fund flows. As of March, BlackRock managed a record $10.47 trillion worth of assets
In a report published on July 3, analyst Christopher Allen wrote that flows into exchange-traded funds — BlackRock’s bread and butter low-fee products – were “healthy” in the second quarter for both equity and fixed-income. With a Buy on the stock, Allen anticipated active funds experiencing “mixed flows”.
Below are what analysts surveyed by FactSet were expecting for some key numbers, as well as the results BlackRock reported:40566There are also plenty of good reasons to be optimistic about AT&T stock in 2023.
Anticipates adjusted net profit of $1.47 billion vs last year’s 1.4 billion
Q4 adjusted earnings per share $9.96 expected vs. $9.28 a year ago
Estimated revenues of $4.85 billion vs $4.46B a year ago
Anticipated rise in assets under management to $10.67 trillion from a year-ago figure of $9.43 trillion
Anticipated long-term inflows of $88.8 billion vs inflow last year $57 Billion
Total net outflows seen at $114.6 billion vs 80.16 bln a year ago
Projected base fees of $3.89 billion vs $3.6 billion a year ago
The stock of BlackRock tends to do well as long as the general market goes up. However, in recent times shareholders have stripped the company.
Shares are up 3.5% this year while those of the S&P 500 have risen 18%, hitting an all-time high on Wednesday. Shares of BlackRock are trading ~15% below its high from late 2021.
The latest underperformance also comes as BlackRock has missed a self-created long-term target: 5% organic base fee growth. In a note after first-quarter earnings in April
Erik Oja wrote that he sees the “long-term growth rate slowing to 8.9% from our prior estimate of 10%, and we believe there is flattening out potential over time towards closer estimates for GDP growth rates”—around an annualized pace of roughly 5%.
Base fees are also at the top of both investors’ and companies’ minds because they hint at how well an asset manager can push its core function—managing clients’ assets. This is the revenue that BlackRock collects for running pools of capital — netting outperformance fees — and makes up most of the total revenues.
For example, RBC Capital Markets analyst Ken Worthington wrote to clients on July 9 that his team bumped up estimates of total assets under management by 2% thanks to improved market conditions in the final weeks of Q2.
But leftover fixed-income returns were “flattish” as equity markets accounted for most of that appreciation, he noted.
Over the past several years, BlackRock (like its more conventional asset management peers) has emphasized a need to diversify away from its bread-and-butter offerings — low-fee funds tracking public markets as those fee hauls dwindle.
Instead, it has been increasing its presence in higher-margin businesses like private markets and software sales.
In May, BlackRock said it plans to acquire Preqin for $3.2 billion in a deal that will give the asset manager control over most of what is being sold as analytics on private markets and link it into Aladdin its sprawling risk-management platform
Earlier this year, BlackRock said it would buy out private infrastructure investment firm Global Infrastructure Partners.
In an earnings call Monday morning, investors will be on the lookout for information about how fast BlackRock is planning to expand in private markets. Morgan Stanley
BlackRock shares Overweight, analyst Michael Cyprys will listen for commentary on the company’s private markets build and fixed-income and organic growth seat opportunities
