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BlackRock reports 20% decline in Q1 net income

April 15
7:48 AM 2016

BlackRock, a US-based investment company, on Thursday, announced a 20% fall in its earnings for the first quarter that ended March 31, 2016. The firm increased its quarterly dividend to $2.29 a share and announced a share repurchase program worth at $300 million.

The investment firm posted a net income of $657 million for the first quarter of 2016, a 20% decrease from $822 million in the previous year period. On a per share basis, earnings declined 19% to $3.92 from $4.84 in the prior year period.

Quarterly operating income dropped 10% to $963 million from $1.07 billion in the same period in 2015. BlackRock reported a revenue of $2.6 billion for the first quarter, down 4% from $2.7 billion in the corresponding period last year.

Meanwhile, adjusted net income slid down 14% to $711 million from $830 million in the previous year period. Adjusted earnings per share declined 13% to $4.25 from $4.89 in the year-ago period. While adjusted operating income dropped 3% to $1.05 billion from $1.01 billion in the prior year period.

Investment advisory, securities loaning sales, and administration charges dropped $31 million from the previous year quarter. But, securities lending sales rose $34 million to $148 million from the prior year period. Performance charges declined $74 million from the previous year period and $135 million sequentially.

According to MarketWatch, assets under management decline 1% to $4.74 trillion from the previous year period hurt by the overseas exchange as well as market headwinds. The company's shares increased 12% over the past three months.

Employee salary and benefits dropped $34 million from the previous year period. In addition, general and management costs declined $21 million from the same period in 2015. Quarterly income tax amounted to $268 million, up from $258 million in the corresponding period last year. The company registered a restructuring cost of $76 million in the current period with regard to its organization simplifying plan.

The investment manager lured $361 billion in fresh funds from investors, with customers in North and South America investing the most. The company's shares increased by over 1.5% in the late-morning trading session. THE WALL STREET JOURNAL quoted Jim Shanahan, a market expert at Edward Jones, who said, "On balance, results were really quite good. The key takeaway here is it's likely we're going to see net outflows for the industry overall for the fourth consecutive quarter, meanwhile, BlackRock is delivering net positive inflows."

According to Laurence Fink, chief executive officer of BlackRock, the second quarter seems brighter for markets across the world following a sluggish start in the year. The analysts polled by Thomson Reuters expected the company to report adjusted earnings per share of $4.29 on revenues of $2.72 billion. BlackRock's earnings were hurt by the global financial crisis.

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