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BlackRock, Inc.’s (BLK - Free Report) third-quarter 2023 adjusted earnings of $10.91 per share handily surpassed the Zacks Consensus Estimate of $8.52. Also, the figure reflects an increase of 14.2% from the year-ago quarter.
Results have benefited from a rise in revenues and higher non-operating income. Further, the assets under management (AUM) balance witnessed improvement. However, higher expenses acted as a headwind.
Net income attributable to BlackRock (on a GAAP basis) was $1.60 billion, jumping 14.1% from the prior-year quarter. We had projected the metric to be $1.24 billion.
Revenues Improve, Expenses Rise
Revenues (on a GAAP basis) were $4.52 billion, marginally lagging the Zacks Consensus Estimate of $4.58 billion. However, the top line increased 4.9% year over year. The rise was driven by an increase in total investment advisory, administration fees and securities lending revenues, and technology services revenues.
Total expenses were $2.89 billion, up 3.6% year over year. The rise was due to an increase in employee compensation and benefits, direct fund expenses, and costs related to the amortization of intangible assets. Our estimate for expenses was $3.06 billion.
Non-operating income (on a GAAP basis) was $171 million, up 3.6% from the year-ago quarter. Our estimate for non-operating income was $130.9 million.
BlackRock’s adjusted operating income was $1.69 billion, up 7% from the prior-year period.
AUM Balance Increases
As of Sep 30, 2023, AUM totaled $9.10 trillion, reflecting a year-over-year rise of 14%. Our estimate for AUM was $9.44 trillion. In the reported quarter, the company witnessed long-term net outflows of $13 billion.
Average AUM was $9.40 trillion as of Sep 30, 2023, up 11% year over year. We had projected the average AUM to be $9.43 trillion.
Share Repurchase Update
BlackRock repurchased shares worth $375 million.
Our View
BLK’s continued efforts to strengthen iShares and ETF operations, along with its initiatives to restructure the actively managed equity business, are expected to aid growth. The acquisition of Kreos Capital likely adds to BlackRock's position as the global credit asset manager. However, the uncertain markets due to macroeconomic concerns have led to an unfavorable operating backdrop for the company.
Earnings Dates & Expectations of Other Asset Managers
Invesco (IVZ - Free Report) is scheduled to announce third-quarter 2023 numbers on Oct 24.
Over the past month, the Zacks Consensus Estimate for IVZ’s quarterly earnings has been revised 2.6% lower to 37 cents. It implies an 8.8% rise from the prior-year reported number.
T. Rowe Price Group, Inc. (TROW - Free Report) is slated to report third-quarter 2023 results on Oct 27.
Over the past 30 days, the Zacks Consensus Estimate for TROW’s quarterly earnings has moved 1.1% lower to $1.79. The figure indicates a 3.8% decline from the prior-year quarter.
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BlackRock (BLK) Q3 Earnings Beat, Revenues & Expenses Rise Y/Y
BlackRock, Inc.’s (BLK - Free Report) third-quarter 2023 adjusted earnings of $10.91 per share handily surpassed the Zacks Consensus Estimate of $8.52. Also, the figure reflects an increase of 14.2% from the year-ago quarter.
Results have benefited from a rise in revenues and higher non-operating income. Further, the assets under management (AUM) balance witnessed improvement. However, higher expenses acted as a headwind.
Net income attributable to BlackRock (on a GAAP basis) was $1.60 billion, jumping 14.1% from the prior-year quarter. We had projected the metric to be $1.24 billion.
Revenues Improve, Expenses Rise
Revenues (on a GAAP basis) were $4.52 billion, marginally lagging the Zacks Consensus Estimate of $4.58 billion. However, the top line increased 4.9% year over year. The rise was driven by an increase in total investment advisory, administration fees and securities lending revenues, and technology services revenues.
Total expenses were $2.89 billion, up 3.6% year over year. The rise was due to an increase in employee compensation and benefits, direct fund expenses, and costs related to the amortization of intangible assets. Our estimate for expenses was $3.06 billion.
Non-operating income (on a GAAP basis) was $171 million, up 3.6% from the year-ago quarter. Our estimate for non-operating income was $130.9 million.
BlackRock’s adjusted operating income was $1.69 billion, up 7% from the prior-year period.
AUM Balance Increases
As of Sep 30, 2023, AUM totaled $9.10 trillion, reflecting a year-over-year rise of 14%. Our estimate for AUM was $9.44 trillion. In the reported quarter, the company witnessed long-term net outflows of $13 billion.
Average AUM was $9.40 trillion as of Sep 30, 2023, up 11% year over year. We had projected the average AUM to be $9.43 trillion.
Share Repurchase Update
BlackRock repurchased shares worth $375 million.
Our View
BLK’s continued efforts to strengthen iShares and ETF operations, along with its initiatives to restructure the actively managed equity business, are expected to aid growth. The acquisition of Kreos Capital likely adds to BlackRock's position as the global credit asset manager. However, the uncertain markets due to macroeconomic concerns have led to an unfavorable operating backdrop for the company.
BlackRock, Inc. Price, Consensus and EPS Surprise
BlackRock, Inc. price-consensus-eps-surprise-chart | BlackRock, Inc. Quote
BlackRock currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Earnings Dates & Expectations of Other Asset Managers
Invesco (IVZ - Free Report) is scheduled to announce third-quarter 2023 numbers on Oct 24.
Over the past month, the Zacks Consensus Estimate for IVZ’s quarterly earnings has been revised 2.6% lower to 37 cents. It implies an 8.8% rise from the prior-year reported number.
T. Rowe Price Group, Inc. (TROW - Free Report) is slated to report third-quarter 2023 results on Oct 27.
Over the past 30 days, the Zacks Consensus Estimate for TROW’s quarterly earnings has moved 1.1% lower to $1.79. The figure indicates a 3.8% decline from the prior-year quarter.