BlackRock's 4th-Quarter Net Rises 24% on Higher Assets Under Management
01/17/2013| 07:12am US/Eastern
By Saabira Chaudhuri
BlackRock Inc.'s (>> BlackRock, Inc.) fourth-quarter profit jumped 24% as the world's largest money manager recorded double-digit revenue growth, helped by higher assets under management.
Results beat Wall Street estimates, and BlackRock raised its quarterly dividend by 12% to $1.68 and expanded its share-repurchase program by 7.5 million shares to 10.2 million shares.
BlackRock is the biggest provider of exchange-traded funds in the U.S., although rival firms have been gaining market share of late. Firms across the ETF industry have been slashing expenses, and in October, BlackRock unveiled fee cuts on six ETFs and introduced new low-fee ETFs amid price competition from Vanguard Group Inc., Fidelity Investments and Charles Schwab Corp. (>> Charles Schwab Corp).
Chief Executive Laurence Fink on Thursday characterized the firm's results for the year as "strong by any measure," noting that BlackRock recorded $107.7 billion of long-term net new business during the year.
Looking forward, he said "the improving global economy provides the potential for greater market stability, but it is likely that political and regulatory dynamics, persistent low-rates and protracted periods of heightened volatility will remain key factors."
The company said net inflows in long-term products totaled $47 billion at the year's end, reflecting equity, fixed income and multiasset class product net inflows of $31.2 billion, $12.4 billion and $4.1 billion, respectively. The net inflows were partially offset by alternatives net outflows of $700 million.
Total assets under management were $3.792 trillion as of the end of the fourth quarter, versus $3.513 trillion a year earlier and $3.673 trillion in the third quarter.
BlackRock reported a profit of $690 million, or $3.93 a share, compared with a year-earlier profit of $555 million, or $3.05 a share. Stripping out one-time items, per-share earnings were $3.96 versus $3.06. Revenue rose 14% to $2.54 billion, reflecting strength in base fees and higher performance fees. Analysts expected earnings of $3.73 a share on $2.49 billion in revenue, according to a poll conducted by Thomson Reuters.
Last week, BlackRock said it would begin disclosing the values of its U.S. money-market funds on a daily basis, a similar move to those announced by Goldman Sachs Group Inc. (>> Goldman Sachs Group, Inc.) and J.P. Morgan Chase & Co. (>> JPMorgan Chase & Co.).
Shares closed Wednesday at $222.24 and were inactive in recent premarket trading. The stock has risen 19% in the past 12 months.
Write to Saabira Chaudhuri at email@example.com