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BlackRock’s second-quarter earnings increased 22% to $ 7.85 per share higher than expected, while net flows plummeted during the period of market uncertainty. The increase in earnings partly reflected a lower share count after BlackRock (BLK) repurchased part of PNC Financial Services (PNC) ‘s massive stake in asset manager.
Analysts tracked by Bloomberg expected BlackRock to report second-quarter earnings of $ 6.96, with estimates ranging from $ 6.37 to $ 7.61.
BlackRock repurchased $ 1.1 billion in shares during the quarter, and its weighted average diluted shares fell 1% to 15.7 million shares during the quarter.
“This was a beneficial move for shareholders as the purchase price was 36% lower than BlackRock’s current share price of $ 566,” analyst Kyle Sanders of Edward Jones said in a note. “BlackRock has historically been very opportunistic during fragile markets and we anticipate that the company will continue to use its strong financial condition to invest in new products, distribution and technology in the coming quarters to widen the competitive gap over its peers.”
This week PNC said its second-quarter earnings more than doubled by selling its 22% stake in BlackRock. BlackRock’s effective tax rate fell to 22.9% during the quarter from 23.2% a year ago. The company’s tax rate fell after BlackRock made a charitable contribution of $ 589 million to its foundation in the first quarter to fund future philanthropic investments “focused on promoting sustainability and economic mobility, and building a financial safety net for underserved and underemployed people. ”
However, amid market uncertainty, net flows plummeted. Flows to BlackRock funds totaled $ 100.22 billion during the quarter, down from $ 150.99 billion a year ago. The second quarter entries were led by cash and fixed income management, BlackRock said.
Meanwhile, second-quarter revenue increased 4% to $ 3.65 billion, beating Bloomberg analyst estimates of $ 3.54 billion.
Total assets under management jumped to $ 7.32 trillion, 7% more than the previous year. In a statement, BlackRock CEO Larry Fink said that amid uncertainty about the future, BlackRock’s “unique ideas, guidance and comprehensive investment solutions …[are] leading to deeper partnerships, and we’re seeing customers entrust BlackRock with more of their assets. “
BlackRock shares rose 1.8% to $ 576.92 in pre-trade.
Write to Leslie P. Norton at [email protected]
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