BlackRock's Cash Engine Gets Boost, but Its Profit Falls
July 19 2019 - 7:17AM
Dow Jones News
By Allison Prang and Dawn Lim
Investors increased the flood of cash flowing into
money-management giant BlackRock Inc. in the last quarter. But the
firm saw profits fall 6.5% from the comparable quarter a year
earlier to $1 billion.
BlackRock reported earnings of $6.41 a share, down from $6.62 a
share. Its earnings missed estimates from analysts polled by
FactSet.
Total net flows, which is the difference between investor money
going into BlackRock and money leaving, rose to $150.99 billion, up
from $20 billion a year earlier. The company's assets under
management rose 8.6%, topping $6.8 trillion.
BlackRock's results show how in the hypercompetitive industry,
an influx of assets doesn't necessarily translate to higher
profits.
The world's biggest money manager helped steer a revolution in
financial markets with exchange-traded funds that trade rapidly and
index funds that track markets cheaply. Chief Executive Larry Fink
is pushing to make BlackRock less exposed to how investors direct
their money and the ebb and flow of markets.
Revenue fell 2.2% to $3.52 billion. Analysts polled by FactSet
expected revenue of $3.58 billion.
Investment advisory, administration fees, and securities lending
revenue fell by 1.4%.
Technology-services revenue rose 20%, but still makes up a small
part of the company's revenue. The firm offers a suite of tools
called Aladdin that financial institutions use to measure risk.
BlackRock struck a deal this year to acquire French software firm
eFront in a bid to add to its technology offerings.
Write to Allison Prang at allison.prang@wsj.com and Dawn Lim at
dawn.lim@wsj.com
(END) Dow Jones Newswires
July 19, 2019 07:02 ET (11:02 GMT)
Copyright (c) 2019 Dow Jones & Company, Inc.
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