BlackRock, Inc. 2Q 2017 Earnings: EPS, Revenue Miss Estimates

The BlackRock 2Q 2017 earnings report was released before opening bell this morning. The firm posted adjusted earnings of $5.24 per share on $2.97 billion in revenue. Analysts had been expecting $5.40 per share in earnings and $3 billion in revenue. In last year’s second quarter, BlackRock reported $4.78 per share in earnings on $2.8 billion in revenue.

BlackRock 2Q 2017 earnings

The firm’s reported earnings amounted to $5.22 per share, compared to $4.73 per share in last year’s second quarter. BlackRock had $5.68 trillion in assets under management at the end of the second quarter, compared to $4.98 billion at the end of last year’s second quarter. StreetAccount predicted $5.66 trillion.

Advisory, administration fees and lending revenue amounted to $2.68 billion, compared to the $2.7 billion that was expected. Net inflows outperformed expectations, however, coming in at $104 billion versus the $86 billion that was projected by StreetAccount. Long-term net inflows amounted to $94 billion, a new record.

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Technology and risk management revenue increased 12% year over year.

BlackRock reports continued momentum

“The combination of BlackRock’s differentiated technology, scale and broad base of investment strategies, including market-cap weighted index products, a spectrum of active offerings from smart beta and factors to high conviction alpha strategies, as well as illiquid alternatives, positions us as the partner of choice to deliver outcomes for both institutional and retail clients,” Chief Executive Laurence Fink said in a statement this morning.

Retail net flows amounted to $6.5 billion, while iShares ETFs net flows were $73.8 billion. iShares assets under management surpassed $1.5 trillion in the second quarter. Active Institutional net flows were $4.6 billion, and Index net flows amounted to $8.7 billion. Cash management assets under management grew 4% year over year to $402.6 billion.

Equity net flows amounted to $38.4 billion, fixed income net flows were $43 billion, and multi-asset net flows were $9.5 billion. Alternatives net flows were $2.7 billion.

The firm’s stock tipped lower in premarket trades this morning, falling by as much as 1.9% to $430 after the BlackRock 2Q 2017 earnings report was released.