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BlackRock Is The 'Amazon.com Of ETFs' But That Isn't Enough To Boost Earnings

Jayson Derrick

Despite being labeled as the "Amazon.com of ETFs" for offering investors a plethora of funds, BlackRock, Inc. (NYSE: BLK) is still falling short of analyst expectation -- and the stock is suffering as a result.

Shares of BlackRock lost nearly 3 percent Monday morning after the company saw $74 billion in exchange-traded fund flows during the second quarter, Bloomberg reported. While this seems like a large number, BlackRock's total revenue of $2.97 billion fell short of the $3.01 billion analysts were expecting.

BlackRock also earned $5.22 per share in the second quarter, also short of the $5.39 per share analysts were modeling.

BlackRock's ETF business is akin to Amazon's business model, Bloomberg explained. Gain a notable first mover advantage and expand into new ETF categories as quickly as possible -- and attract as much money as possible. However, the average ETF fee is now 33 cents per $100 invested, which is down from 40 cents per $100 invested in 2009, Bloomberg highlighted.

View more earnings on BLK

Meanwhile, BlackRock's other businesses may be showing some signs of concern. Specifically, two long-only funds that failed to beat their benchmarks. BlackRock also suffered from weaker securities lending revenue and less M&A activity.

In fact, BlackRock's revenue has now fallen short of expectations for four straight quarters even though assets under management rose 5 percent last quarter to $5.7 trillion.

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