BlackRock Rocks in Q2 - Analyst Blog
July 20 2011 - 2:00PM
Zacks
BlackRock Inc.’s (BLK) second quarter 2011
adjusted earnings came in at $3.00 per share, fairly ahead of the
Zacks Consensus Estimate of $2.92.
The result also compares favorably with last year's earnings of
$2.96 and the prior-quarter's earnings of $2.37.
Adjusted results for the quarter leave out the PNC LTIP funding
obligation, Merrill Lynch compensation contribution and income tax
law changes.
GAAP net income came in at $619 million or $3.21 per share,
against $568 million or $2.89 per share in the prior quarter and
$432 million or $2.21 per share in the year-ago quarter.
Better-than-expected results were primarily aided by strong
top-line growth, owing to a better investment performance and asset
mix, which were offset partially by higher operating expenses.
On June 1, 2011, BlackRock completed the repurchase of
Bank of America Corporation’s (BAC) remaining
ownership interest of 13.6 million preferred shares for
approximately $2.5 billion. The company issued $2.0 billion in debt
to raise funds for the deal.
Quarter in Detail
On an operating basis, BlackRock’s total revenue in the quarter
increased 4% sequentially and 17% year over year to $2.23 billion.
However, total revenue missed the Zacks Consensus Estimate of $2.34
billion.
Total expenses remained almost flat sequentially but crept up
11% year over year to $1.48 billion. The year-over-year increase
reflects a significant rise in employee compensation and benefits
expenses, general and administration expenses, and direct fund
expenses.
BlackRock’s operating income on a GAAP basis stood at $866
million, up 9% from $798 million in the prior quarter and 24% from
$697 million in the year-earlier quarter.
Asset Position
Assets under management totaled $3.66 trillion as of June 30,
2011, almost flat sequentially but up 16% year over year. The
increase was driven by market and competitive investment
performance. Net new business in long-term products was $18.4
billion during the reported quarter.
Our Take
Results for the reported quarter reflect financial strength in
the company. Though there are concerns related to the sluggish
economic recovery, we expect BlackRock to continue benefiting from
the growing need for risk management solutions within the financial
industry.
BlackRock currently retains a Zacks #3 Rank, which translates
into a short-term ‘Hold’ rating.
BANK OF AMER CP (BAC): Free Stock Analysis Report
BLACKROCK INC (BLK): Free Stock Analysis Report
Zacks Investment Research
BlackRock (NYSE:BLK)
Historical Stock Chart
From May 2024 to Jun 2024
BlackRock (NYSE:BLK)
Historical Stock Chart
From Jun 2023 to Jun 2024