BlackRock Misses Estimates in 4Q15 on Higher Expenses
BlackRock Sees Revenues Rise, Misses Earnings Estimates in 4Q15
BlackRock misses estimates
BlackRock (BLK), the world’s biggest asset manager, reported its 4Q15 earnings on January 15, 2016. The company missed Wall Street analysts’ adjusted EPS (earnings per share) estimates of $4.80, posting EPS of $4.75.
BlackRock reported net income of $861 million in 4Q15, up by 6% from $813 million in the prior year’s quarter. Reported revenues were $2.9 billion, up by 3% when compared with the prior year’s quarter. However, the company’s total assets under management remained flat at $4.6 trillion. Rising expenses offset higher revenues. The stock fell by 4.3% on the announcement of the results.
In a company press release on January 15, 2016, BlackRock chairman and chief executive officer Laurence D. Fink noted, “Our full year 2015 results once again demonstrate that in times of global macro-uncertainty and market volatility, BlackRock’s diverse business model can generate strong and consistent financial results. Annual long-term net inflows of $152 billion, representing 4% organic asset growth, drove year-over-year increases in revenue, operating income and earnings per share, and reflected positive flows across the breadth of our active and index & iShares platform, including flows of more than $1 billion into 65 distinct Retail and iShares funds.”
BlackRock overview
BlackRock has become the world’s largest asset manager in the span of just two decades. The company is managing $4.6 trillion in assets for governments, sovereign wealth funds, institutions, and retail clientele. It manages assets through various product offerings such as portfolio investing equities, fixed income, alternatives, and money market instruments across global markets and asset classes.
Other asset managers
BlackRock posted revenues of $11.4 billion in the last fiscal year. Let’s compare this to revenues for BlackRock’s peers:
JPMorgan Chase (JPM): $51 billion
Bank of New York Mellon (BK): $3.2 billion
State Street (STT): $2.7 billion
Together, these companies form 1.7% of the SPDR S&P 500 ETF (SPY).
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