UPDATE 4-BlackRock reels in billions but profits miss expectations

Fri Jan 15, 2016 12:15pm EST
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By Trevor Hunnicutt and Amrutha Gayathri

Jan 15 (Reuters) - Investors drove $54 billion into BlackRock Inc funds during a weak and turbulent fourth quarter for financial markets, driving profits higher, but the company nonetheless missed Wall Street analysts' forecasts.

Net income grew by 6 percent at the world's largest asset manager to $861 million in the quarter, or $5.11 per share, on stronger-than-expected revenue from managing investors' money. The company said it would increase its quarterly cash dividend by 5 percent.

Those investors piled into the New York-based company's iShares brand exchange-traded funds. BlackRock ETFs took in $60.22 billion in new money in the latest quarter, up from $44.19 billion a year earlier.

The lion's share invested in ETFs went into equities, driven by demand for U.S. stocks.

Yet higher headcount, performance fees and other expenses, which Chief Executive Officer Laurence D. Fink credited to compensation and other one-time costs from acquisitions, weighed on BlackRock's income. Expenses were 5 percent higher during the quarter than the prior year.

Excluding factors that the company said do not affect its value, BlackRock earned $4.75 per share, falling short of the average analyst estimate of $4.80, according to Thomson Reuters I/B/E/S.