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BlackRock (BLK) Beats on Q4 Earnings, Expenses Decline
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BlackRock, Inc. (BLK - Free Report) reported fourth-quarter 2016 adjusted earnings of $5.14 per share, which handedly surpassed the Zacks Consensus Estimate of $5.02. Moreover, the bottom line came in 8% higher than the year-ago quarter.
The better-than-expected number was primarily driven by a decline in total expenses. Also, higher revenues for the quarter acted as a tailwind. Further, assets under management (AUM) experienced a year-over-year rise and the company witnessed strong inflows during the quarter.
Net income (on a GAAP basis) came in at $851 million for the quarter, down 1% from the prior-year quarter.
The company’s full-year 2016 adjusted earnings of $19.29 per share also surpassed the Zacks Consensus Estimate of $19.21. However, the reported figure represents a year-over-year decline of 2%. Net income for 2016 was $3.17 billion, down 5% year over year.
Revenues for the quarter inched up 1% year over year to $2.89 billion. The rise was due to an increase in all the components except investment advisory performance fees and distribution fees. However, the reported figure missed the Zacks Consensus Estimate of $2.94 billion.
Revenues for 2016 came in at $11.16 billion, down 2% year over year. Also, the reported figure missed the Zacks Consensus Estimate of $11.19 billion.
Total expenses amounted to $1.67 billion, down 3.5% year over year. There was a decline in almost all the expense components except distribution and servicing costs.
Non-operating expense (on a GAAP basis) came in at $38 million, as against non-operating income of $11 million in the year-ago period. BlackRock’s adjusted operating income came in at $1.23 billion, up 8% year over year.
Strong AUM & Inflows
As of Dec 31, 2016, AUM totaled $5.1 trillion, up 11% year over year. Further, during the reported quarter, the company witnessed long-term net inflows of $87.86 billion.
Capital Deployment Plans
During the year, BlackRock returned $2.7 billion to its shareholders.
The company announced a quarterly cash dividend of $2.50 per share, a hike of 9% from the prior payout. The dividend will be paid on Mar 23 to shareholders on record as of Mar 6.
Also, its Board of Directors has authorized additional 6 million worth of share repurchases under its existing share repurchase program.
Our Viewpoint
BlackRock seems well positioned for opportunistic acquisitions. Also, its initiatives to gain market share in the ETF business are expected to drive revenue growth.
However, high dependence on overseas revenues and regulatory restrictions on its revenue sources are the primary concerns. In addition, increase in regulatory compliance costs, compensation costs as well as higher marketing costs are expected to keep expenses high in the near-term.
Among other investment managers, The Blackstone Group L.P. (BX - Free Report) is expected to announce fourth-quarter 2016 results on Jan 26, Waddell & Reed Financial, Inc. is expected to announce results on Jan 31 and Ameriprise Financial, Inc. (AMP - Free Report) is expected to announce its numbers on Feb 1.
The Best Place to Start Your Stock Search
Today, you are invited to download the full list of 220 Zacks Rank #1 "Strong Buy" stocks – absolutely free of charge. Since 1988, Zacks Rank #1 stocks have nearly tripled the market, with average gains of +26% per year. Plus, you can access the list of portfolio-killing Zacks Rank #5 "Strong Sells" and other private research. See these stocks free >>.
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BlackRock (BLK) Beats on Q4 Earnings, Expenses Decline
BlackRock, Inc. (BLK - Free Report) reported fourth-quarter 2016 adjusted earnings of $5.14 per share, which handedly surpassed the Zacks Consensus Estimate of $5.02. Moreover, the bottom line came in 8% higher than the year-ago quarter.
The better-than-expected number was primarily driven by a decline in total expenses. Also, higher revenues for the quarter acted as a tailwind. Further, assets under management (AUM) experienced a year-over-year rise and the company witnessed strong inflows during the quarter.
Net income (on a GAAP basis) came in at $851 million for the quarter, down 1% from the prior-year quarter.
The company’s full-year 2016 adjusted earnings of $19.29 per share also surpassed the Zacks Consensus Estimate of $19.21. However, the reported figure represents a year-over-year decline of 2%. Net income for 2016 was $3.17 billion, down 5% year over year.
Revenues Increase & Expenses Decline
Revenues for the quarter inched up 1% year over year to $2.89 billion. The rise was due to an increase in all the components except investment advisory performance fees and distribution fees. However, the reported figure missed the Zacks Consensus Estimate of $2.94 billion.
Revenues for 2016 came in at $11.16 billion, down 2% year over year. Also, the reported figure missed the Zacks Consensus Estimate of $11.19 billion.
Total expenses amounted to $1.67 billion, down 3.5% year over year. There was a decline in almost all the expense components except distribution and servicing costs.
Non-operating expense (on a GAAP basis) came in at $38 million, as against non-operating income of $11 million in the year-ago period. BlackRock’s adjusted operating income came in at $1.23 billion, up 8% year over year.
Strong AUM & Inflows
As of Dec 31, 2016, AUM totaled $5.1 trillion, up 11% year over year. Further, during the reported quarter, the company witnessed long-term net inflows of $87.86 billion.
Capital Deployment Plans
During the year, BlackRock returned $2.7 billion to its shareholders.
The company announced a quarterly cash dividend of $2.50 per share, a hike of 9% from the prior payout. The dividend will be paid on Mar 23 to shareholders on record as of Mar 6.
Also, its Board of Directors has authorized additional 6 million worth of share repurchases under its existing share repurchase program.
Our Viewpoint
BlackRock seems well positioned for opportunistic acquisitions. Also, its initiatives to gain market share in the ETF business are expected to drive revenue growth.
However, high dependence on overseas revenues and regulatory restrictions on its revenue sources are the primary concerns. In addition, increase in regulatory compliance costs, compensation costs as well as higher marketing costs are expected to keep expenses high in the near-term.
BlackRock, Inc. Price, Consensus and EPS Surprise
BlackRock, Inc. Price, Consensus and EPS Surprise | BlackRock, Inc. Quote
Currently, BlackRock carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Among other investment managers, The Blackstone Group L.P. (BX - Free Report) is expected to announce fourth-quarter 2016 results on Jan 26, Waddell & Reed Financial, Inc. is expected to announce results on Jan 31 and Ameriprise Financial, Inc. (AMP - Free Report) is expected to announce its numbers on Feb 1.
The Best Place to Start Your Stock Search
Today, you are invited to download the full list of 220 Zacks Rank #1 "Strong Buy" stocks – absolutely free of charge. Since 1988, Zacks Rank #1 stocks have nearly tripled the market, with average gains of +26% per year. Plus, you can access the list of portfolio-killing Zacks Rank #5 "Strong Sells" and other private research. See these stocks free >>.