The improvement in equity markets drove
) fourth-quarter adjusted earnings of $4.92 per share, which
significantly surpassed the Zacks Consensus Estimate of $4.38.
Further, this was up 24% from $3.96 earned in the year-ago
Despite negative market sentiment, shares of BlackRock gained
more than 3% in the pre-trading session, indicating investors'
positive response following the release. The movement of the
stock price when the trading session opens will give a better
idea about whether BlackRock has been able to meet expectations.
Better-than-expected results were attributable to rise in
revenues, partly offset by higher operating expenses. Further,
significant growth in assets under management (AUM) was a
tailwind. Moreover, a hike in quarterly dividend reflecting the
company's strong liquidity position.
After considering certain non-recurring items, net income
attributable to BlackRock in the reported quarter was $841
million or $4.86 per share, up from $690 million or $3.93 per
share in the year-ago quarter.
For the full year 2013, adjusted earnings per share were $16.58,
up 21% year over year. This also outpaced the Zacks Consensus
Estimate of $16.05.
Quarter in Detail
Total revenue was $2.78 billion, increasing 14% from the
prior-year quarter. Higher long-term net inflows, improvement in
markets, increase in performance fees and strength in BlackRock
Solutions were the primary growth drivers. Further, the reported
figure came ahead of the Zacks Consensus Estimate of $2.72
Total expenses were at $1.64 billion, up 7% on a year-over-year
basis. The increase was mainly due to rise in employee
compensation and benefits.
Non-operating income, net of non-controlling interests, was
recorded at $15 million, compared with non-operating expense of
$107 million in the prior-year quarter.
BlackRock's operating income, on a GAAP basis, was $1.13 billion,
increasing 13% from the year-ago quarter.
AUM totaled $4.32 trillion as of Dec 31, 2013, up 14% from the
year-ago period. Further, the company witnessed total long-term
inflows of $40.5 trillion in the reported quarter.
BlackRock repurchased about $250 million shares in the reported
quarter. Thus, for the full year, the company bought back $1
billion worth of shares.
Along with the earnings release, BlackRock announced a 15%
increase in its quarterly cash dividend to $1.93 per share. The
dividend will be paid on Mar 24 to shareholders of record on Mar
BlackRock's strong capital deployment as well as organic and
inorganic activities are expected to benefit the company going
forward. Moreover, its initiatives to increase market share in
the ETF business is commendable. However, continuously increasing
expenses and high dependence on fee-based revenues remain causes
BlackRock currently carries a Zacks Rank #3 (Hold).
Among other investment management firms,
) is scheduled to release results on Jan 30, while
Ameriprise Financial, Inc.
Waddell & Reed Financial, Inc.
) will report on Feb 4.
AMERIPRISE FINL (AMP): Free Stock Analysis
BLACKROCK INC (BLK): Free Stock Analysis
INVESCO LTD (IVZ): Free Stock Analysis Report
WADDELL&REED -A (WDR): Free Stock Analysis
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