By Saabira Chaudhuri
BlackRock Inc.'s (BLK) second-quarter profit was up 32% as the money manager reported higher assets under management, while revenue logged a double-digit percentage gain.
BlackRock is the biggest provider of exchange-traded funds in the U.S., although rival firms have been gaining market share of late.
Thursday, Chief Executive Laurence Fink said BlackRock generated record base fees during the quarter and $11.9 billion in long-dated net new business across a variety of products, including 11 funds that each raised more than $1 billion.
Total assets under management stood at $3.857 trillion as of the end of the first quarter, up 8% from a year earlier, although down roughly 2% from the first quarter.
BlackRock reported a profit of $729 million, or $4.19 a share, compared with a year-earlier profit of $554 million, or $3.08 a share. Stripping out one-time items, per-share earnings were $4.15 versus $3.10 a year ago.
Revenue jumped 11% to $2.48 billion.
Analysts expected earnings of $3.82 a share on $2.49 billion in revenue, according to a poll conducted by Thomson Reuters.
Thursday, BlackRock said its iShares ETF business reported net outflows of $963 million in the latest quarter, bringing the unit's assets under management to $774.4 billion. This compares with $25.6 billion in net inflows and assets under management of $802.8 billion in the first quarter.
ETFs--mutual funds that typically track an index but are traded on an exchange--have surged in popularity as investors seek out lower-cost investment products.
Meanwhile, BlackRock's stock funds are lagging behind many of the company's U.S. competitors, according to a recent report from Credit Suisse Group AG. BlackRock has signaled that the stock-investing business should be a driver of growth, partly because the firm's fixed-income side already is quite large. But the poor performance is costing BlackRock fees and the firm recently overhauled its U.S. stock unit, including a purge of management teams at more than half of the funds in the group.
Shares closed Wednesday at $272.29 and were inactive in recent premarket trading. The stock has risen 56% in the past 12 months.
Write to Saabira Chaudhuri at [email protected]
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