Blackrock profit trumps estimates as Wall Street bounces back from coronavirus
Blackrock ended the quarter with $7.32 trillion in assets under management, up from $6.84 trillion a year earlier as profit beat predictions, it said today.
The S&P 500 rose 20 per cent in the second quarter after falling by that amount in the first three months of 2020 as the coronavirus pandemic slammed the economy.
“We had more conversations with our clients in the last six months than we have probably had in aggregate in years,” chief executive Larry Fink told Reuters.
“Clients are looking to Blackrock more than ever before.”
Blackrock reported a 21 per cent jump in quarterly profit as investors poured money into its fixed-income funds and cash management services.
The New York-based company’s net income rose to $1.21 billion, or $7.85 per share. Analysts had expected a profit of $6.99 per share, according to IBES data from Refinitiv.
The asset manager’s fixed-income funds took in $60.27 billion in new money. Its cash-management business attracted $24.2 billion in net inflows in the second quarter.
“Improved investor sentiment led to robust asset gathering,” said Kyle Sanders, an analyst with St. Louis-based financial services firm Edward Jones.
“We were most encouraged by the sharp rebound in asset flows, as we believe sustained flow growth above industry peers is a key driver for the stock,” he said.
The asset manager’s technology business, a key area of growth for the firm, reported a 17 per cent rise in revenue.
BlackRock’s financial markets advisory unit, which manages the U.S. Federal Reserve’s bond-buying programme, generated $39 million in revenue, down from $53 million for the same quarter a year ago.
BlackRock shares, up about 13 per cent for the year, were about one per cent higher in early trading Friday.