BlackRock’s profit jumps 22% in the fiscal third quarter

Written by: Wajeeh Khan
October 13, 2020
  • BlackRock’s profit jumps 22% in the fiscal third quarter.
  • The U.S. firm notes an 18% annualised increase in Q3 revenue.
  • BlackRock values total new inflows at £99.59 billion in Q3.

BlackRock Inc. (NYSE: BLK) reported its financial results for the fiscal third quarter on Tuesday that came in stronger than what the analysts had anticipated. The company revealed a 22% annualised growth in its profit in Q3.

Shares of the company were reported more than 3% up in premarket trading on Tuesday. BlackRock jumped another 1.5% on market open. It is now exchanging hands at £497 per share versus a year to date low of £252.77 per share in March. Interested in investing in the stock market online? Here’s a simple guide to get you started.

BlackRock’s Q3 financial results versus analysts’ estimates

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BlackRock said that its net income in the third quarter printed at £1.05 billion that translates to £6.85 per share. In the same quarter last year, it had registered a much lower £860 million of net income or £5.52 per share.

In September, BlackRock expressed concerns that it might not call 100% of its staff back to the office after the Coronavirus pandemic that has so far infected more than 8 million people in the United States and caused over 220 thousand deaths.

Adjusted for one-time items, the global investment management corporation earned £7.12 per share in Q3. According to FactSet, experts had forecast a lower £6.00 of adjusted per-share earnings instead. In an announcement in the last week of August, BlackRock said it will enter the Chinese market with a new mutual fund.

In terms of revenue, the New York-based company noted an 18% year over year increase to £3.37 billion versus £3.04 billion expected, as per FactSet. BlackRock valued its total new inflows in the recent quarter at £99.59 billion attributed primarily to cash management and an increase in fixed income.

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CEO Larry Fink’s comments on Tuesday

CEO Larry Fink of BlackRock commented on the earnings report on Tuesday and said:

“Each of our strategic investment areas, including iShares ETFs, alternatives and technology, continue to grow, while strong investment performance has driven positive active flows over the last year.”

According to BlackRock, its revenue from securities lending, administration fees, and investment advisory posted an 8% year over year increase in the third quarter. Revenue from technology services came in 9% higher n Q3 than the comparable quarter of last year.

At the time of writing, BlackRock is valued at £75.48 billion and has a price to earnings ratio of 22.57.