BlackRock profit rises with assets, tops estimates

Reuters

BOSTON (Reuters) - Money manager BlackRock Inc's second-quarter earnings rose 43 percent, topping expectations, as assets under management increased, driving up fees.

Net income rose to $619 million, or $3.21 per share, from $432 million, or $2.21 a share, a year earlier, the New York-based company said on Wednesday.

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Adjusted earnings were $3.00 a share, topping analysts' average forecast of $2.88, according to Thomson Reuters I/B/E/S.

Assets under management were $3.659 trillion at June 30, up 16 percent from a year earlier and up 0.3 percent from the end of the first quarter.

Chris Spahr, equities analyst at Calyon Securities, said the earnings beat showed the benefits of the company's wide range of products, which allow it to grow despite volatile markets.

"This is a company that I would expect to continue to hit singles and doubles," he said, using a baseball analogy. "They're not going to be many swings and misses because they're so big, and that's a good thing."

Investors added a net $18.4 billion to BlackRock's long-term funds during the latest quarter, excluding outflows in money funds and some specialized portfolios.

As at other fund companies, volatile markets during the quarter meant BlackRock faced both market depreciation and net redemptions from some stock funds. Outflows from its active equity products totaled $8.9 billion.

But investors added money in most other areas. BlackRock's popular iShares exchange traded funds took in $11.6 billion, up 11 percent from the first quarter. Investors added $20.7 billion to its multi-asset class products, which BlackRock said reflected strong demand for fiduciary management and asset allocation products.

Under Chief Executive Laurence Fink, BlackRock has been adding consumer-oriented products to its traditional institutional areas. "We continue to execute on our growth strategies," Fink said in a statement, adding that the second-quarter results "attest to the strength of BlackRock's business model and our unique franchise."

(Reporting by Ross Kerber; additional reporting by Andrew Longstreth; Editing by Lisa Von Ahn and John Wallace)