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BlackRock (BLK) Gains on Q2 Earnings Beat, Expenses Decline (Revised)
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BlackRock, Inc.’s (BLK - Free Report) second-quarter 2023 adjusted earnings of $9.28 per share handily surpassed the Zacks Consensus Estimate of $8.47. However, the figure reflects an increase of 26% from the year-ago quarter.
Shares of BLK gained more than 1% in the pre-market trading on better-than-expected results. A full day’s trading session will depict a clearer picture.
Results have benefited from a decline in expenses and higher non-operating income. Further, the assets under management (AUM) balance witnessed improvement. However, lower revenues acted as a headwind.
Net income attributable to BlackRock (on a GAAP basis) was $1.37 billion, jumping 27% from the prior-year quarter. We had projected the metric to be $1.16 billion.
Revenues & Expenses Decline
Revenues (on a GAAP basis) were $4.46 billion, marginally lagging the Zacks Consensus Estimate of $4.47 billion. Also, the top line declined 1% year over year. The fall stemmed from lower total investment advisory, administration fees and securities lending revenues, and distribution fees.
Total expenses were $2.85 billion, down marginally. The decrease was due to a fall in general and administrative expenses and distribution and servicing costs. Our estimate for expenses was $3 billion.
Non-operating income (on a GAAP basis) was $251 million against non-operating expenses of $347 million in the year-ago quarter.
BlackRock’s adjusted operating income was $1.68 billion, down 3% from the prior-year period.
AUM Balance Up
As of Jun 30, 2023, AUM totaled $9.43 trillion, reflecting a year-over-year rise of 1%. Our estimate for AUM was $8.69 trillion. In the reported quarter, the company witnessed long-term net inflows of $57 billion.
Average AUM was $9.19 trillion as of Jun 30, 2023, up 2%. We had projected the average AUM to be $8.89 trillion.
Share Repurchase Update
BlackRock repurchased shares worth $375 million.
Our View
BLK’s continued efforts to strengthen iShares and ETF operations, along with its initiatives to restructure the actively-managed equity business, are expected to continue aiding growth. However, the uncertain markets and volatility due to macroeconomic concerns have led to an unfavorable operating backdrop for the company.
Earnings Dates & Expectations of Other Asset Managers
Invesco (IVZ - Free Report) is scheduled to announce second-quarter 2023 numbers on Jul 25.
Over the past month, the Zacks Consensus Estimate for IVZ’s quarterly earnings has been unchanged at 38 cents. It implies a 2.6% decline from the prior-year reported number.
Ameriprise Financial (AMP - Free Report) is slated to report second-quarter 2023 results on Jul 26.
Over the past 30 days, the Zacks Consensus Estimate for AMP’s quarterly earnings has moved marginally lower to $7.36. The figure indicates a 26.7% rise from the prior-year quarter.
(We are reissuing this article to correct a mistake. The original article, issued on July 14, 2023, should no longer be relied upon.)
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BlackRock (BLK) Gains on Q2 Earnings Beat, Expenses Decline (Revised)
BlackRock, Inc.’s (BLK - Free Report) second-quarter 2023 adjusted earnings of $9.28 per share handily surpassed the Zacks Consensus Estimate of $8.47. However, the figure reflects an increase of 26% from the year-ago quarter.
Shares of BLK gained more than 1% in the pre-market trading on better-than-expected results. A full day’s trading session will depict a clearer picture.
Results have benefited from a decline in expenses and higher non-operating income. Further, the assets under management (AUM) balance witnessed improvement. However, lower revenues acted as a headwind.
Net income attributable to BlackRock (on a GAAP basis) was $1.37 billion, jumping 27% from the prior-year quarter. We had projected the metric to be $1.16 billion.
Revenues & Expenses Decline
Revenues (on a GAAP basis) were $4.46 billion, marginally lagging the Zacks Consensus Estimate of $4.47 billion. Also, the top line declined 1% year over year. The fall stemmed from lower total investment advisory, administration fees and securities lending revenues, and distribution fees.
Total expenses were $2.85 billion, down marginally. The decrease was due to a fall in general and administrative expenses and distribution and servicing costs. Our estimate for expenses was $3 billion.
Non-operating income (on a GAAP basis) was $251 million against non-operating expenses of $347 million in the year-ago quarter.
BlackRock’s adjusted operating income was $1.68 billion, down 3% from the prior-year period.
AUM Balance Up
As of Jun 30, 2023, AUM totaled $9.43 trillion, reflecting a year-over-year rise of 1%. Our estimate for AUM was $8.69 trillion. In the reported quarter, the company witnessed long-term net inflows of $57 billion.
Average AUM was $9.19 trillion as of Jun 30, 2023, up 2%. We had projected the average AUM to be $8.89 trillion.
Share Repurchase Update
BlackRock repurchased shares worth $375 million.
Our View
BLK’s continued efforts to strengthen iShares and ETF operations, along with its initiatives to restructure the actively-managed equity business, are expected to continue aiding growth. However, the uncertain markets and volatility due to macroeconomic concerns have led to an unfavorable operating backdrop for the company.
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 Dates & Expectations of Other Asset Managers
Invesco (IVZ - Free Report) is scheduled to announce second-quarter 2023 numbers on Jul 25.
Over the past month, the Zacks Consensus Estimate for IVZ’s quarterly earnings has been unchanged at 38 cents. It implies a 2.6% decline from the prior-year reported number.
Ameriprise Financial (AMP - Free Report) is slated to report second-quarter 2023 results on Jul 26.
Over the past 30 days, the Zacks Consensus Estimate for AMP’s quarterly earnings has moved marginally lower to $7.36. The figure indicates a 26.7% rise from the prior-year quarter.
(We are reissuing this article to correct a mistake. The original article, issued on July 14, 2023, should no longer be relied upon.)