BlackRock 3Q Profit Grows on ETF Demand, Tighter Expenses

Despite a challenging economy that led to a decline in assets under management, BlackRock (NYSE:BLK) revealed on Wednesday a stronger third-quarter profit that trumped Wall Street expectations on tighter expenses and renewed interest in its exchange-traded funds.

The world’s largest asset manager posted net income of $595 million, or $2.83 a share, up 8% compared with $551 million, or $2.83 a share, in the same quarter last year, beating the Street’s view of $2.63 a share.

Revenue for the three months ended Sept. 30 was $2.23 billion, up 6% from $2.1 billion a year ago, narrowly below average analyst estimates polled by Thomson Reuters of $2.26 billion.

The New York-based company achieved adjusted operating margin of 40%, up from 38.4% a year ago. BlackRock CEO Larry Fink attributed that gain to the company’s strong expense discipline and benefits of having diverse products.

“In a quarter marked by heightened economic uncertainty and declining markets, BlackRock’s broadly diversified, global platform delivered strong financial results,” Fink said in a statement.

The company realized growth across its ETF offerings, which took in a total of $10.8 billion during the period. During the quarter, BlackRock launched a series of ETFs in Europe to extend its market share of new business across that region.

However, the economic downturn did take its toll on BlackRock, and assets under management slipped 3% year-over-year to $3.3 trillion and 9% from the previous quarter. That decline was due primarily to $303.9 billion of market-related declines across products, the company said.