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BlackRock (BLK) Q4 Earnings Beat Estimates as Revenues Rise

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BlackRock, Inc.’s (BLK - Free Report) fourth-quarter 2019 adjusted earnings of $8.34 per share surpassed the Zacks Consensus Estimate of $7.67. Moreover, the figure was 37.2% higher than the year-ago quarter’s number.

Results benefitted from an improvement in revenues. Moreover, growth in assets under management (AUM), driven by net inflows, was a positive. However, higher expenses hurt results to some extent.

Net income attributable to BlackRock (on a GAAP basis) was $1.30 billion, up 40.3% from the prior-year quarter.

For 2019, adjusted earnings were $28.48 per share, up from $26.93 recorded a year ago. Moreover, the figure surpassed the Zacks Consensus Estimate of $27.87 per share. Net income attributable to BlackRock (GAAP basis) was $4.48 billion for the year, increasing 4% from the previous year.

Revenues Improve, Expenses Rise

Revenues for the reported quarter (on a GAAP basis) were $3.98 billion, increasing 15.8% year over year. The upside stemmed from an increase in almost all components of revenues, except for distribution fees. Moreover, the reported figure surpassed the Zacks Consensus Estimate of $3.88 billion.

For 2019, revenues (GAAP basis) were $14.54 billion, increasing 2.4% year over year. Moreover, the reported figure beat the Zacks Consensus Estimate of $14.43 billion.

Total expenses for the quarter amounted to $2.44 billion, up 11.5% year over year. The increase was due to rise in all cost components. However, the company did not incur any restructuring charge in the quarter.

Non-operating income (on a GAAP basis) was $96 million against non-operating expenses of $72 million recorded in the year-ago quarter.

BlackRock’s adjusted operating income was $1.54 billion, up 17.4% year over year.

Net Inflows Support AUM Growth

As of Dec 31, 2019, AUM totaled $7.43 trillion, reflecting rise of 24.3% year over year. In the reported quarter, the company witnessed long-term net inflows of $99 billion.

Our Viewpoint

BlackRock’s acquisitions and expansion efforts along with initiatives to restructure its actively managed equity business are expected to boost the top line and AUM. Moreover, its capital deployment actions reflect strong balance sheet position. However, a continued increase in operating expenses might 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 #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Earnings Release Schedule of Other Investment Managers

Federated Investors, Inc. and Virtus Investment Partners, Inc. (VRTS - Free Report) are scheduled to report results on Jan 30 and Jan 31, respectively. Ares Capital Corporation (ARCC - Free Report) is scheduled to announce results on Feb 12.

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