BlackRock profit falls as shift from stocks hits fee revenue

Thu Jul 14, 2016 4:32pm EDT
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By Trevor Hunnicutt

NEW YORK (Reuters) - BlackRock Inc's profit fell 3.7 percent in the second quarter as global market turmoil spurred investors to shift from stocks to cash and bonds, hurting fee income at the world's largest asset management company.

New York-based BlackRock said on Thursday the revenue it takes in from fees for managing money and lending out securities fell 1.8 percent to $2.49 billion from the same period a year ago, even as the total assets it manages rose to nearly $5 trillion.

On June 23, Britain's shock vote to leave the European Union briefly sent the financial markets into a tailspin. BlackRock's second quarter ended June 30.

"Equity markets have rebounded a lot," BlackRock CEO Larry Fink said in an interview. "We have a lot of wind at our back today."

BlackRock's net income fell to $789 million, or $4.73 per share, from $819 million, or $4.84 per share, a year earlier. Revenue was down 3.5 percent, to $2.8 billion.

On an adjusted basis, the company earned $4.78 per share, roughly in line with the average analyst's estimate, according to Thomson Reuters I/B/E/S.

Even so, BlackRock shares slipped 0.6 percent to $355.19, compared with a gain of about 0.8 percent by its peers in a Dow Jones index tracking U.S. asset managers.

Analysts said sales of BlackRock funds were lower than they had expected. BlackRock attracted $1.54 billion in "long-term" net flows in the second quarter, compared with outflows of $7.30 billion in the year-earlier quarter.   Continued...

The BlackRock logo is seen outside of its offices in New York January 18, 2012. B REUTERS/Shannon Stapleton/File Photo