BlackRock, Inc.’s BLK third-quarter 2022 adjusted earnings of $9.55 per share surpassed the Zacks Consensus Estimate of $7.93. The figure reflects a decrease of 15.8% from the year-ago quarter.
Results benefited from a decline in expenses. However, lower revenues and assets under management (AUM) balance were the major headwinds.
Net income attributable to BlackRock (on a GAAP basis) was $1.41 billion, down 16.4% from the prior-year quarter.
Revenues & Expenses Decline
Revenues (on a GAAP basis) were $4.31 billion, falling 14.6% year over year. The decline largely stemmed from a decrease in almost all components of revenues, except for technology services revenues. The figure also lagged the Zacks Consensus Estimate of $4.41 billion.
Total expenses amounted to $2.79 billion, down 10.6%. The decline was due to a fall in all cost components.
Non-operating income (on a GAAP basis) was $165 million, down 5.1% from the year-ago quarter.
BlackRock’s adjusted operating income was $1.59 billion, down 21.7% from the prior-year period.
AUM Balance Dips
As of Sep 30, 2022, AUM totaled $7.96 trillion, reflecting a year-over-year fall of 15.9%. In the reported quarter, the company witnessed long-term net inflows of $65 billion. However, unfavorable market change and FX impact hurt AUM balance.
Average AUM of $8.48 trillion as of Sep 30, 2022, declined 11.5% year over year.
Share Repurchase Update
BlackRock repurchased shares worth $375 million in the reported quarter.
Our View
BLK’s continued efforts to strengthen the iShares and ETF operations, along with its initiatives to restructure the actively-managed equity business, are expected to remain tailwinds. However, the uncertain markets and extreme volatility on the back of macroeconomic concerns have led to an unfavorable operating backdrop for BlackRock.
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 Ltd. IVZ is scheduled to announce third-quarter 2022 numbers on Oct 25.
Over the past month, the Zacks Consensus Estimate for IVZ’s quarterly earnings has moved 2.1% south to 46 cents, implying a 40.3% decline from the prior-year reported number.
Virtus Investment Partners, Inc. VRTS is slated to report third-quarter 2022 results on Oct 26.
Over the past 30 days, the Zacks Consensus Estimate for Virtus Investment’s quarterly earnings has moved marginally lower to $6.42. This indicates a 33.9% fall from the prior-year quarter.
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