BlackRock Inc’s (BLK.N) first-quarter profit beat Wall Street estimates on Thursday, as a continued rally in global financial markets and broad-based strength in the asset manager’s businesses helped vault the firm’s assets under management to a record $9.01 trillion.
“The broadness of our platform is really resonating with clients,” BlackRock’s chief executive, Larry Fink, said in an interview.
Clients, who a few years ago came to BlackRock mainly for its index and fixed income actives business, are now looking to the firm for a range of needs including investing in alternatives, active equities, risk management and technology, Fink said.
The firm reported a record $172 billion in net inflows to its various funds during the quarter with strength in its iShares and alternative assets businesses.
“They are definitely widening the competitive gap against peers and they continue to take wallet share,” said Kyle Sanders, an analyst with St. Louis-based financial services firm Edward Jones.
BlackRock’s net income rose to $1.2 billion, or $7.77 per share, in the three months ended March 31, from $1.03 billion, or $6.60 per share, a year earlier. The reading was above the Refinitiv IBES estimate of $7.64 per share.
Global financial markets, equities in particular, trended higher in the first quarter, building on sharp gains of the prior two quarters, as accommodative global central bank policy and improving growth prospects helped lift investors’ risk appetite.
BlackRock’s Fink, in a CNBC interview on Thursday, voiced optimism about financial markets as the economy continues to recover from the coronavirus pandemic.
The S&P 500 Index (.SPX) rose 3.8% in the first quarter, its fifth straight quarterly gain. The index hit a new closing high on Wednesday.
“While all asset managers will benefit from rising equity markets this quarter, we believe BlackRock’s ability to deliver outsized flow growth remains a key differentiator,” Edward Jones’ Sanders said.
BlackRock logged solid organic base fee growth of 14%, led by strength in active equities.
Revenue from investment advisory and administration fees, which makes up most of BlackRock’s earnings, rose to $3.47 billion in the quarter, from $2.9 billion a year earlier.
“Overall I thought it was a decent quarter with above peer metrics,” CFRA Research analyst Cathy Seifert said.
BlackRock’s shares, which hit a record high on Wednesday ahead of the results, have risen 11% this year, compared with a 17% gain for a Thomson Reuters index that includes more than a dozen of BlackRock’s industry rivals in the United States.
BlackRock’s shares were up about 1% in trading before the bell on Thursday.