UPDATE: BlackRock 2Q Profit Up 43% Despite Difficult Market

BlackRock Inc.'s (BLK) second-quarter earnings rose 43% as assets under management at the world's largest money manager grew by 16% from a year earlier.

BlackRock's better-than-expected profit came despite market uncertainties in the second quarter over issues like the sovereign debt crisis in Europe, political stalemate on the U.S. debt ceiling and prospects of slower economic growth. The company also noted the money market industry contracted as rates kept shrinking.

"Growth was driven largely by investment performance and asset mix," Chairman and Chief Executive Laurence D. Fink said.

The S&P 500 Index ended the quarter flat after see-sawing throughout the quarter.

BlackRock reported a profit of $619 million, or $3.21 a share, up from $432 million, or $2.21 a share, a year earlier. Excluding prior-year acquisition-related costs and other items, earnings were up at $3 from $2.37. It acquired Barclays Global Investors, which manages money for both institutional and individual investors around the world, for $13.5 billion in December 2009.

BlackRock's revenue increased 16% to $2.35 billion mostly owing to increased long-term assets under management.

Operating margin also improved to 36.9% from 35.0% in the first quarter and 34.3% in the second quarter last year.

Analysts polled by Thomson Reuters most recently forecast earnings of $2.88 on revenue of $2.32 billion.

Assets under management rose to $3.659 trillion as of June 30, from $3.15 trillion a year earlier and $3.648 trillion the previous quarter.

Declines in equity, alternative, cash management and advisory businesses were more than offset by net new business in fixed and multi-asset class products.

BlackRock's new business pipeline totaled $84.3 billion at July 14, it said, including $13.0 billion funded since the end of the quarter and $71.3 billion of new mandates to be funded.

Shares were up 2.9% premarket. Through Tuesday, the stock was down 3.6% this year.

-Amy Or, Dow Jones Newswires; 212-416-3142; amy.or@dowjones.com

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