BlackRock first-quarter profit jumps 10 percent

Reuters

BlackRock Inc said on Tuesday that first-quarter net income rose 10 percent as investors increasingly turned to the money manager's higher-fee stock funds.

New York-based BlackRock said net income increased to $632 million, or $3.62 per share, from $572 million, or $3.14 per share, a year earlier.

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During the quarter, investors showed a strong preference for equities for the first time since the financial crisis. At BlackRock, customers added $33.7 billion to equity offerings out of total net inflows of $39.4 billion into long-term funds.

Assets under management rose to a record $3.94 trillion at the end of the quarter.

Investors withdrew more money than they added to BlackRock's bond funds, pulling out $2.6 billion. They also withdrew $2.2 billion from currency funds, while adding $9 billion to multi-asset portfolios and putting $1.5 billion in core alternative funds.

Low yields on bonds and fears that interest rates may rise and hurt bond prices prompted some of the moves toward stocks, BlackRock Chief Executive Officer Laurence Fink said.

"This is having a significant impact on where we're seeing asset flows as investors seek other sources of yield, including from equities," Fink said in a statement.

Excluding costs to launch a closed end fund, a compensation plan funded by PNC Financial Services Group and other items, BlackRock reported earnings of $3.65 per share. On that basis, analysts on average had expected $3.58, according to Thomson Reuters I/B/E/S.

Shares of BlackRock closed on Monday at $253.86, down 3.5 percent, on the New York Stock Exchange. The stock has risen 23 percent so far this year, surpassing a 9 percent gain for the Standard & Poor's 500 Index.