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Why is an Earnings Beat Less Likely for BlackRock (BLK) in Q1?
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BlackRock, Inc. (BLK - Free Report) is slated to report first-quarter 2022 results on Apr 13, before the opening bell. Its revenues and earnings for the quarter are expected to have witnessed year-over-year growth.
In fourth-quarter 2021, BLK’s earnings surpassed the Zacks Consensus Estimate. Results benefited from an improvement in revenues, partly offset by higher expenses. Long-term net inflows resulted in a rise in assets under management (AUM) balance.
BlackRock has an impressive earnings surprise history. Its earnings surpassed the Zacks Consensus Estimate in each of the trailing four quarters, delivering a surprise of 6.5%, on average.
The company’s business activities and prospects in the to-be-reported quarter have encouraged analysts to revise earnings estimates upward. The Zacks Consensus Estimate for BlackRock’s first-quarter earnings of $9.22 has been revised marginally upward over the past 30 days. The figure indicates a rise of 18.7% from the year-ago quarter’s reported number.
The consensus estimate for first-quarter sales is pegged at $4.90 billion, which suggests an increase of 11.4% from the prior-year quarter’s reported number.
Before we take a look at what our quantitative model predicts for the to-be-reported quarter, let’s discuss the factors that are likely to have impacted the company’s quarterly performance.
Key Factors & Estimates for Q1
BlackRock has been a dominant player in the exchange traded fund (“ETF”) market, given its continued investments in the U.S. iShare core ETFs. With investors increasing allocations toward ETFs instead of alternative investments to reduce management costs, the company’s iShares inflows have been strong over the past several quarters.
Thus, supported by expected asset inflows, BlackRock’s AUM balance is likely to have improved in the first quarter, thereby positively impacting the related fees.
The Zacks Consensus Estimate for total investment advisory, administration fees and securities-lending revenues for the to-be-reported quarter is pegged at $4.05 billion, suggesting a 2.1% sequential rise.
However, the Zacks Consensus Estimate for the company’s investment advisory performance fees is pegged at $70 million, indicating a fall of 78.7% from the previous quarter’s reported number.
Likewise, the consensus estimate for distribution fees of $401 million indicates a fall of 2.4% from the previous quarter’s reported figure.
BlackRock’s expenses have been elevated over the past few years. Given that the company continues with its restructuring initiatives to modify the size and shape of its workforce, and improve operating efficiency, overall costs are expected to have increased in the first quarter as well.
Earnings Whispers
According to our quantitative model, the chances of BlackRock’s earnings beating the Zacks Consensus Estimate this time are low. This is because it does not have the right combination of the two key ingredients — a positive Earnings ESP and a Zacks Rank #3 (Hold) or better — which is required to be confident of an earnings surprise call.
You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Earnings ESP: The Earnings ESP for BlackRock is -1.14%.
Zacks Rank: The company currently carries a Zacks Rank #4 (Sell).
Stocks Worth a Look
A couple of finance stocks that you may want to consider as these have the right combination of elements to post an earnings beat in their upcoming releases per our model, are Commerce Bancshares, Inc. (CBSH - Free Report) and Associated BancCorp (ASB - Free Report) .
The Earnings ESP for Commerce Bancshares is +6.01% and it carries a Zacks Rank #2 (Buy) at present.
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Why is an Earnings Beat Less Likely for BlackRock (BLK) in Q1?
BlackRock, Inc. (BLK - Free Report) is slated to report first-quarter 2022 results on Apr 13, before the opening bell. Its revenues and earnings for the quarter are expected to have witnessed year-over-year growth.
In fourth-quarter 2021, BLK’s earnings surpassed the Zacks Consensus Estimate. Results benefited from an improvement in revenues, partly offset by higher expenses. Long-term net inflows resulted in a rise in assets under management (AUM) balance.
BlackRock has an impressive earnings surprise history. Its earnings surpassed the Zacks Consensus Estimate in each of the trailing four quarters, delivering a surprise of 6.5%, on average.
The company’s business activities and prospects in the to-be-reported quarter have encouraged analysts to revise earnings estimates upward. The Zacks Consensus Estimate for BlackRock’s first-quarter earnings of $9.22 has been revised marginally upward over the past 30 days. The figure indicates a rise of 18.7% from the year-ago quarter’s reported number.
The consensus estimate for first-quarter sales is pegged at $4.90 billion, which suggests an increase of 11.4% from the prior-year quarter’s reported number.
Before we take a look at what our quantitative model predicts for the to-be-reported quarter, let’s discuss the factors that are likely to have impacted the company’s quarterly performance.
Key Factors & Estimates for Q1
BlackRock has been a dominant player in the exchange traded fund (“ETF”) market, given its continued investments in the U.S. iShare core ETFs. With investors increasing allocations toward ETFs instead of alternative investments to reduce management costs, the company’s iShares inflows have been strong over the past several quarters.
Thus, supported by expected asset inflows, BlackRock’s AUM balance is likely to have improved in the first quarter, thereby positively impacting the related fees.
The Zacks Consensus Estimate for total investment advisory, administration fees and securities-lending revenues for the to-be-reported quarter is pegged at $4.05 billion, suggesting a 2.1% sequential rise.
However, the Zacks Consensus Estimate for the company’s investment advisory performance fees is pegged at $70 million, indicating a fall of 78.7% from the previous quarter’s reported number.
Likewise, the consensus estimate for distribution fees of $401 million indicates a fall of 2.4% from the previous quarter’s reported figure.
BlackRock’s expenses have been elevated over the past few years. Given that the company continues with its restructuring initiatives to modify the size and shape of its workforce, and improve operating efficiency, overall costs are expected to have increased in the first quarter as well.
Earnings Whispers
According to our quantitative model, the chances of BlackRock’s earnings beating the Zacks Consensus Estimate this time are low. This is because it does not have the right combination of the two key ingredients — a positive Earnings ESP and a Zacks Rank #3 (Hold) or better — which is required to be confident of an earnings surprise call.
You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Earnings ESP: The Earnings ESP for BlackRock is -1.14%.
Zacks Rank: The company currently carries a Zacks Rank #4 (Sell).
Stocks Worth a Look
A couple of finance stocks that you may want to consider as these have the right combination of elements to post an earnings beat in their upcoming releases per our model, are Commerce Bancshares, Inc. (CBSH - Free Report) and Associated BancCorp (ASB - Free Report) .
The Earnings ESP for Commerce Bancshares is +6.01% and it carries a Zacks Rank #2 (Buy) at present.
CBSH is scheduled to report quarterly numbers on Apr 19. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Associated BancCorp is slated to report quarterly earnings on Apr 21.
ASB, which carries a Zacks Rank of 2 at present, has an Earnings ESP of +3.72%.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.