BlackRock beats second-quarter profit estimates on robust inflows

Revenue fell 1.4% to $4.4 billion from a year earlier driven by market movements over the past 12 months

A BlackRock building in New York. The company ended the second quarter with $9.4 trillion in assets under management. Reuters

BlackRock beat second-quarter profit estimates on Friday as investors continued to pour money into its various funds on the back of a rally in markets following a bruising start to the year.

Markets have staged a comeback so far this year, braving the Federal Reserve's interest rate increases and a banking crisis, which have raised risks of an economic downturn later in 2023.

The New York company ended the second quarter with $9.4 trillion in assets under management (AUM), up from $8.5 trillion a year earlier and $9.1 trillion in the first quarter.

Revenue at BlackRock fell by 1.4 per cent to $4.4 billion from a year earlier, driven by the impact of market movements on average AUM over the past 12 months, it said.

Net inflows for the quarter stood at $80 billion, down from $89.6 billion a year ago.

The world's largest asset manager, which makes most of its money from investment advisory and administration services fees, reported a 25 per cent rise in its second-quarter adjusted profit.

The adjusted profit of $9.28 a share leapfrogged analysts' estimates of $8.46, according to Refinitiv IBES.

Larry Fink, BlackRock's chairman and chief executive, said clients had consolidated their businesses with the asset manager, helping to boost exchange-trade fund inflows.

During an investor event last month, Mr Fink said he was not planning to leave the asset manager “any time soon”.

The company also laid off less than 1 per cent of its total workforce last month due to budget reallocations made in a push to support critical priorities. It had cut 500 jobs earlier in the year as well.

BlackRock has been attempting to enter into the cryptocurrency space as it seeks the Securities and Exchange Commission's permission to list an ETF that will reflect the price of Bitcoin.