BlackRock profit falls as stock market rout bites

BlackRock attracted $50 billion of net inflows in the third quarter, including $35bn in long-term net inflows. Eduardo Munoz / Reuters

BlackRock, the world’s biggest asset manager, posted an 8 per cent drop in third-quarter profit as the stock market rout hit earnings.

Net income dropped to US$843 million in the June-to- September period from $917m in the year-earlier period, the company said. Third-quarter revenue rose 2 per cent to $2.9 billion from $2.85bn a year earlier. Assets under management remained flat at $4.5 trillion.

Diluted earnings per share declined 7 per cent to $5 a share from $5.37 a share a year earlier, nonetheless beating the $4.58 average estimate of 19 analysts, according to data compiled by Bloomberg.

“BlackRock’s third quarter 2015 results, including year-over-year growth in revenue and operating income, demonstrate the resilience of our global, diversified investment platform,” said Laurence Fink, BlackRock’s chairman and chief executive.

The S&P 500 Index fell 8.7 per cent in the last quarter, the worst quarter since the 14 per cent decline in the third quarter of 2011, which was plagued by Europe’s debt crisis and investor worries over the global economy.

BlackRock attracted $50bn of net inflows in the third quarter, including $35bn in long-term net inflows. Long-term net inflows of $25.5bn in the Americas and $17bn in Europe, Middle East and Africa (Emea), partially offset net outflows of $7.5bn from clients in the Asia-Pacific.

At the end of September, the company managed 62 per cent of its long-term assets under management in the Americas and 38 per cent in Emea and Asia-Pacific.

Meanwhile, the weakening economy of China and the slowdown in developing economies drove global investors to withdraw $40bn from developing countries in the third quarter, the worst quarterly outflow since the 2008 financial crisis, according to the Institute of International Finance.

The institute is projecting negative inflows to emerging markets this year for the first time since 1988. The IMF has again revised its forecast for global economic growth lower to 3.1 per cent, down from 3.3 per cent in its July forecast, owing to weakening emerging economics, particularly China, and the commodity price rout.

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