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BlackRock quarterly net income falls 16%

Tags: BlackRock
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BlackRock Inc. (BLK-N), the world's largest money manager by assets, said fourth-quarter net income fell 16 percent as revenue and managed assets declined, but it also drew new investor cash.

Net income declined to $555 million US, or 3.05 per share, compared with $657 million, or $3.35 per share, a year earlier.

Adjusted earnings were $3.06 per share. On that basis, analysts on average had expected $2.99, according to Thomson Reuters I/B/E/S.

Assets under management at Dec. 31 were $3.51 trillion, down from $3.56 trillion a year earlier.

Revenue fell $266 million to $2.2 billion, reflecting lower fees from investment advisory work and administration fees because of the lower assets under management.

Also contributing to the revenue decline was a fall-off in performance fees by more than half, to $147 million in the fourth quarter, mainly because of lower performance fees on hedge funds.

In addition, BlackRock said it took a $32 million restructuring charge for a 3 percent cut in its workforce in the quarter. The New York company had about 10,100 employees as of Dec. 31, roughly 900 more than a year earlier.

RARE INFLOW

Although total assets fell from a year earlier, they were up 5 percent from the end of the third quarter. The increase reflected a $143.3 billion improvement in market and investment performance as stock indexes rose, and an inflow of $23.8 billion of new investor cash to BlackRock long-term products like equity and bond funds.

The net inflow is likely to capture attention at a time when other, smaller asset managers are expected to report net outflows of investor cash with their earnings next week.

BlackRock Chief Executive Officer Laurence Fink has pushed hard to diversify the company into areas lines like exchange-traded funds. Its iShares ETF business had an inflow of $20.1 billion in the quarter.

"Our results reinforce the underlying strength and momentum of our diversified client-focused model," Fink said in a statement.

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