UPDATE: 7:15 a.m. EDT — BlackRock, Inc. reported first-quarter adjusted earnings of $4.25 per share on revenue of $2.62 billion, slightly below analysts’ estimates of $4.29 a share and revenue of $2.72 billion.
The New York-based asset manager also reported a 20 percent drop in net income in the three-month period ending March 31, to $657 million from $822 million in the year-earlier period. The company ended the quarter with $4.74 trillion in assets under management, largely unchanged from the first quarter of 2015 and a slight increase over the $4.65 trillion it reported in the previous quarter.
American investment management firm BlackRock, Inc. will report its first quarter earnings before markets open Thursday. The company, which has $4.65 trillion in assets under management, has consistently outperformed its peers.
BlackRock is expected to report earnings of $4.29 per share, down 12 percent from the year-earlier period on a largely unchanged revenue of $2.72 billion, according to analysts polled by Reuters. The company’s pretax profit, meanwhile, is expected to decline 6 percent year-on-year in the three-month period ended March 31, falling to $1.06 billion from $1.13 billion.
In the previous quarter, BlackRock reported revenue of $2.86 billion and earnings of $4.75 per share. Analysts had forecast earnings of $4.80 a share on $2.84 billion in revenue.
Over the past year, profit margins of many asset management firms have been hit by low interest rates in the U.S. and the rise of low-cost index funds, which has hurt their actively-managed mutual fund portfolio. According to the Wall Street Journal, shares of publicly trade American asset management funds dropped 18 percent in 2015, broadly underperforming the S&P 500 Index, which fell 2.1 percent over the same period.
Over the past 10 years, 80 percent of all large-cap equity funds and 87 percent of all mid-cap funds have underperformed the S&P 500 and the S&P MidCap 400 indexes respectively.
In such a scenario, BlackRock has been a distinct outlier. In 2015, for instance, 76 percent the company’s actively managed stock funds outperformed their benchmark.
On Wednesday, the company’s shares closed up 2.7 percent on the New York Stock Exchange. So far this year, Blackrock’s shares have risen 1.8 percent, outperforming both the Dow Jones and S&P 500 indexes which rose 1 percent each since the start of 2016.