Back to top

Image: Bigstock

BlackRock (BLK) Q4 Earnings Beat, Revenues & AUM Rise Y/Y

Read MoreHide Full Article

BlackRock, Inc.’s (BLK - Free Report) fourth-quarter 2020 adjusted earnings of $10.18 per share surpassed the Zacks Consensus Estimate of $8.84. The figure reflects a rise of 22.1% from the year-ago quarter’s number.

Results for the quarter benefited from an improvement in revenues, partly offset by higher expenses. Further, long-term net inflows resulted in a rise in assets under management (“AUM”) balance, which was a major positive for the company.

Net income attributable to BlackRock (on a GAAP basis) was $1.55 billion, up 19% from the prior-year quarter.

For 2020, adjusted earnings per share of $33.82 surpassed the Zacks Consensus Estimate of $32.81. Also, the figure was 18.8% higher than the previous year. Net income was $4.93 billion, up 10% year over year.

Revenues Improve & Expenses Rise

Revenues for the reported quarter (on a GAAP basis) were $4.48 billion, increasing 12.6% year over year. The upside stemmed from an increase in almost all components of revenues, except for advisory and other revenues. Moreover, the reported figure surpassed the Zacks Consensus Estimate of $4.36 billion.

For 2020, GAAP revenues of $16.21 billion surpassed the Zacks Consensus Estimate of $16.09 billion. Also, the figure reflects an increase of 11.5% from 2019.

Quarterly total expenses amounted to $2.63 billion, up 7.8% from the year-ago quarter. The rise was due to an increase in all cost components, except for costs related to the amortization of intangible assets, and general and administration costs.

Non-operating income (on a GAAP basis) was $319 million, up significantly from $96 million recorded in the year-ago quarter.

BlackRock’s adjusted operating income was $1.85 billion, up 20.2% year over year.

Net Inflows Support AUM Growth

As of Dec 31, 2020, AUM totaled $8.68 trillion, reflecting a rise of 16.8% year over year. In the reported quarter, the company witnessed long-term net inflows of $116 billion.

Our Viewpoint

BlackRock’s continued efforts to strengthen the iShares and ETF operations along with its initiatives to restructure the actively managed equity business are expected to continue to boost the top line and AUM, going forward. However, persistently increasing expenses (as witnessed in the fourth quarter as well) are expected to hurt the bottom line.

BlackRock, Inc. Price, Consensus and EPS Surprise

 

BlackRock, Inc. Price, Consensus and EPS Surprise

BlackRock, Inc. price-consensus-eps-surprise-chart | BlackRock, Inc. Quote

BlackRock currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Earnings Release Schedule of Other Finance Companies

Commerce Bancshares (CBSH - Free Report) is scheduled to report quarterly numbers on Jan 20, whereas BankUnited (BKU - Free Report) is slated to release figures on Jan 21. Capital One Financial Corporation (COF - Free Report) is slated to release earnings figures on Jan 26.

Legal Marijuana: An Investor’s Dream

Imagine getting in early on a young industry primed to skyrocket from $17.7 billion in 2019 to an expected $73.6 billion by 2027.

Although marijuana stocks did better as the pandemic took hold than the market as a whole, they’ve been pushed down. This is exactly the right time to get in on selected strong companies at a fraction of their value before COVID struck. Zacks’ Special Report, Marijuana Moneymakers, reveals 10 exciting tickers for urgent consideration.

Download Marijuana Moneymakers FREE >>

Published in