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BlackRock (BLK) Q1 Earnings Beat on Higher Revenues, Inflows


BlackRock’s BLK first-quarter 2018 adjusted earnings came in at $6.70 per share, which handily outpaced the Zacks Consensus Estimate of $6.42. Also, the bottom line was 28% higher than the year-ago quarter.

Results benefited from an improvement in revenues, rise in assets under management (AUM) and steady long-term inflows. However, increase in operating expenses acted as a headwind.

Net income (on a GAAP basis) was $2.19 billion, up 27% from the prior-year quarter.

Revenue Growth Offsets Rise in Expenses

Revenues (GAAP basis) were $3.58 billion, increasing 16% year over year. The rise was driven by increase in all revenue components except investment advisory performance fees, which remained stable. The reported figure beat the Zacks Consensus Estimate of $3.28 billion.

Total expenses amounted to $2.21 billion, up 13% year over year. This was due to a rise in all cost components except amortization of intangible assets, which witnessed a decline.

Non-operating expenses (on a GAAP basis) were $16 million, up significantly from $7 million recorded in the year-ago quarter.

BlackRock’s adjusted operating income came in at $1.38 billion, up 20% year over year.

Strong AUM & Inflows

As of Mar 31, 2018, AUM totaled $6.32 trillion, reflecting an increase of 17% year over year. Further, during the reported quarter, the company witnessed long-term net inflows of $54.63 billion.

Share Repurchase Update

During the reported quarter, BlackRock repurchased shares worth $355 million.

Our Viewpoint

BlackRock remains well poised for growth driven by opportunistic acquisitions and its initiatives to gain market share in the ETF business. However, mounting operating expenses and increased dependence on overseas revenues remain primary near-term concerns.

BlackRock, Inc. Price, Consensus and EPS Surprise

BlackRock, Inc. Price, Consensus and EPS Surprise | BlackRock, Inc. Quote

BlackRock carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Earnings Release Dates of Other Investment Managers

The Blackstone Group L.P. BX, Ameriprise Financial, Inc. AMP and Waddell & Reed Financial, Inc. WDR are scheduled to announce first-quarter 2018 results on Apr 19, Apr 23 and May 1, respectively.

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