BlackRock assets top $10 trillion, revenue misses slightly

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The BlackRock logo is seen outside its offices in New York, U.S., October 17, 2016. REUTERS/Brendan McDermid

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Jan 14 (Reuters) – BlackRock Inc’s (BLK.N) fourth-quarter earnings beat analysts’ estimates on Friday as fee income from the world’s largest fund manager rose and assets under management rose. surpassed $10 trillion, but stocks fell as earnings edged higher than Wall Street estimates. .

The strong end to the year in global financial markets helped boost the performance of asset managers in general, with BlackRock also benefiting from its large scale and broad reach.

Assets under management were $10.01 trillion at the end of the quarter, up from $8.68 trillion a year earlier.

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“This is an impressive milestone and just illustrates their dominance in the fastest growing areas of the industry,” said Edward Jones analyst Kyle Sanders. “They continue to muster assets at a remarkable clip.”

Net inflows for the quarter were $212 billion, of which long-term net flows were $169 billion, up from $116 billion a year earlier.

“Our business is more diverse than ever – active strategies, including alternatives, contributed more than 60% of organic base fee growth in 2021,” chief executive Larry Fink said in a statement.

BlackRock’s revenue from investment advisory, securities lending and administrative fees, its largest segment, reached $3.9 billion in the fourth quarter, helped by global trading volumes hitting a record high in 2021, surpassing $5 trillion for the first time.

Adjusted earnings increased 2.5% to $1.61 billion, or $10.42 per share, in the quarter ended December 31, from $1.57 billion, or $10.18 per share. action, a year earlier.

Analysts on average had expected the company to post earnings of $10.16 per share, according to IBES data from Refinitiv.

Revenue rose nearly 14% to $5.11 billion, slightly below analysts’ consensus estimate of $5.17 billion.

BlackRock shares fell 1.7% to $852.66 in morning trading. Markets had a difficult start to the year as investors digested the Federal Reserve’s expected decision to start raising interest rates to curb rising inflation.

“2022 is going to be a year of transition for the entire asset management space,” said CFRA analyst Cathy Seifert. “Investors need to take a little pause and consider what is sustainable and what is not.”

BlackRock said it was targeting “record” investment in its business in 2022, including an expected headcount increase of up to 10%.

“Looking ahead, they’re going back into investment mode,” Sanders of Edward Jones said. “They’re going to spend a lot, and that’s probably going to make it difficult for them to have meaningful profit margin and EPS growth in 2022.”

BlackRock stock is up nearly 27% last year, compared to 32% for the S&P 1500 Index of Asset Managers and Custodian Banks (.SPCOMAMCB).

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Reporting by Sohini Podder in Bengaluru and Saqib Iqbal Ahmed and Lewis Krauskopf in New York; Editing by Vinay Dwivedi and Marguerita Choy

Our standards: The Thomson Reuters Trust Principles.

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