BlackRock profit rise beats expectations

City A.M. Reporter
BlackRock, the world's largest money manager by assets, has posted a 43 per cent jump in second-quarter profit, topping expectations.

The New York-based company has long been known as a fixed-income institutional manager, but CEO Laurence Fink has pressed into new areas such as exchange traded funds and multi-asset products - areas that took in healthy inflows of cash from investors in the latest quarter.

For the three months ended June 30, its net income rose to $619m (£384m), or $3.21 per share, from $432m, or $2.21 a share, a year earlier.

Adjusted earnings were $3.00 a share, topping analysts' average forecast of $2.88.

Assets under management were $3.66 trillion at June 30, up 16 percent from a year earlier and up 0.3 per cent from the end of the first quarter.

Analysts attributed the gains to BlackRock's wide range of products, which allowed it to grow despite volatile markets.

"This is a company that I would expect to continue to hit singles and doubles," said Calyon Securities analyst Chris Spahr, using a baseball analogy.

"There are not going to be many swings and misses because they're so big, and that's a good thing."

In a note to investors, Ticonderoga Securities analyst Douglas Sipkin wrote that BlackRock's scale means it is not as dependent on inflows of cash as its smaller rivals.

"BLK is no longer a play on flow momentum, although we do believe organic growth trends will head higher throughout the year," he wrote.

Investors added a net $18.4bn to BlackRock's long-term funds during the second quarter, excluding outflows in money funds, some specialized portfolios and merger-related outflows.