Yahoo Finance BlackRock posts big Q1, stock soars as assets rebound over $6T
Investment management giant BlackRock on Monday reported first quarter earnings that blew away Wall Street’s expectations, as the firm’s assets under management rebounded strongly from the prior quarter, and sent its stock on a rally.
The firm, which manages over $6 trillion in assets, posted earnings of $6.61 per share, down from the comparable year-ago period of $6.70 per adjusted share. Revenues were $3.34 billion, down slightly from $3.58 billion in the first quarter of 2018.
Analysts on average had expected BlackRock to post $6.13 per share against $3.34 billion in revenue.
During the first three months of 2019, BlackRock saw $65 billion of quarterly total net inflows, and dropped base fees by 5%. Big fund managers like BlackRock have struggled to charge normally big fees, amid a wave of “passive” vehicles that cost less and basically track indexes.
BlackRock’s stock, traded on the New York Stock Exchange, surged by over 2% in early trading to $462.30.
However, the firm reported an 11% year-on-year surge in technology services revenue. Meanwhile, total assets under management bounced to more than $6.5 trillion, after falling below the $6 trillion mark late last year.
“BlackRock continues to build and evolve our organization, ahead of changing client needs, in order to drive strong investment performance, enhance the client experience and deliver long-term value for shareholders,” CEO Larry Fink said in a statement.
Reflecting a whipsaw first quarter, BlackRock took a bath on its equity portfolio, which posted a loss of more than $26 billion during the quarter. That was more than offset by a jump in fixed income of nearly $80 billion, and a rise in long-term investments of around $59 billion.
BlackRock’s results may help cheer investors who punished the market on Monday, after big banks Citigroup (C) and Goldman Sachs (GS) reported disappointing first quarter earnings.
While both beat market expectations on earnings, both banks revealed some underlying weaknesses during a volatile market that unsettled investors. Taken together, they suggested the Federal Reserve’s pausing of interest rate hikes was beginning to undercut banks’ profitability.
BlackRock’s stock, traded on the New York Stock Exchange, ended the session down by $2.50 to $451.86. The shares’ languid stock performance led to Fink taking a pay cut last year.
Javier David is an editor for Yahoo Finance. Read more:
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Follow Javier on Twitter: @TeflonGeek
