BlackRock First-Quarter Results Exceed Expectations; Net Inflows Slide Year Over Year

BlackRock (BLK) on Friday reported first-quarter results that rose year over year and topped Wall Street’s estimates, even though the asset manager’s net inflows declined.

The company delivered adjusted earnings of $9.81 per share for the March quarter, climbing from $7.93 a year earlier and topping the Capital IQ-polled consensus of $9.39. Revenue rose 11% to $4.73 billion driven in part by higher performance fees and technology services revenue. The Street’s view was for $4.71 billion.

The firm generated total net inflows of $57.19 billion, compared with $110.32 billion in the prior-year quarter. The company said the latest quarterly inflows reflect $19 billion of net outflows from cash management, impacted by roughly $14 billion of net redemptions during the last week of March ahead of the Good Friday holiday, Chief Financial Officer Martin Small said during an earnings call, according to a Capital IQ transcript.

“Outflows were driven by clients redeeming balances to have cash on hand during a time when many businesses are open, but the financial markets are closed,” according to Small. BlackRock’s shares were down 1.5% in midday trading.

First-quarter long-term net inflows came in at $76.41 billion, “partially offset by seasonal outflows from institutional money market funds,” Small told analysts. The company’s assets under management advanced 15% to a “record” $10.473 trillion, aided by consistent organic growth and positive market movements, BlackRock said.

Total investment advisory, administration fees and securities lending revenue rose to $3.78 billion from $3.5 billion a year ago. Technology services sales gained 11% on an annual basis, “reflecting sustained demand” for the company’s portfolio management software, Aladdin, Small said on the call. Total expenses increased to $3.04 billion from $2.81 billion.

“We see significant growth potential in infrastructure, technology, retirement and whole portfolio solutions,” Chief Executive Laurence Fink said in a statement. “We will continue to stay in front of client needs to deliver long-term growth for our clients, shareholders and employees.”

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