Investors poured money into BlackRock’s funds during the second quarter.
Jeenah Moon/Bloomberg
BlackRock BlackRock
’s second-quarter earnings plunged 30% to $7.36 a share, hurt by high inflation, rising rates, and the worst start to the year for stocks and bonds in half a century. But despite the gloomy outlook for financial markets, investors continued to pour money into the company’s funds.
BlackRock (ticker: BLK) said total assets slid to $8.49 trillion, down 11% from $9.5 trillion a year earlier. But quarterly net inflows rose to $90 billion from $81 billion a year ago, a strong sign that the world’s largest investment management company is creating products that clients want and that investors have confidence in BlackRock’s strategies.
In a statement, BlackRock said the inflows reflect “continued strength of broad-based platform with positive flows across all product types and regions.”
Asset managers are facing brutal headwinds: Global stock indexes have fallen around 20% this year while bond indexes have fallen about 10%. At the same time, the U.S. dollar is having a banner year. The exchange rate between the euro and the dollar this week hit parity, in which the two currencies were worth the same amount, for the first time in 20 years.
For the second quarter, adjusted profit fell to $1.12 billion, or $7.36 a share, from $1.61 billion, or $10.45 a share, a year earlier.
Revenue in the quarter slipped 6% to $4.53 billion.
Analysts, on average, had expected BlackRock to report earnings of $1.23 billion, or $7.87 a share, on revenue of $4.55 billion, according to FactSet.
“I cannot think of a time when BlackRock’s strategic focus has been more aligned with the needs of our clients than it is today,” CEO Larry Fink said in a statement.
“Over the course of BlackRock’s 34-year history, we have experienced numerous periods of volatility and uncertainty, and BlackRock has always come through stronger. It is during periods like these that we differentiate ourselves even more with clients and further deepen those relationships. I see more opportunities for BlackRock today than ever before, and remain confident in our ability to deliver long-term growth for our clients, shareholders and employees.”
In a note, Edward D. Jones analyst Kyle Sanders said revenue and earnings per share were, as expected, soft compared to recent quarters, proving that even BlackRock isn’t immune to a market downturn.
Still, he added: “We were impressed with BlackRock’s ability to sustain robust asset inflows in choppy markets and we believe BlackRocks’s inflow growth will once again far outpace the asset management industry this quarter. In our view, difficult markets highlight the resiliency of BlackRock’s business model and its ability to remain ahead of the pack in key high-growth categories.”
BlackRock’s stock has fallen more than 35% this year. In premarket trading, shares were down 1.3% to $588.63.
Write to Lauren Foster at [email protected]
