BlackRock reported better-than-expected quarterly results with revenue rising 25% year over year to $6.51 billion and adjusted EPS at $11.55. Assets under management reached a record $13.463 trillion, pushing stock to a new high of $1,179. The firm brought in $205 billion in new client money, exceeding expectations. Fee growth was at 10%, the highest in four years.
BlackRock’s push into new asset classes like cryptocurrencies, private credit, and infrastructure assets is driving growth in fees. Active ETF products, including iShares Bitcoin and Ethereum ETFs, contributed to strong organic base fee growth of 10%. Investment advisory performance fees of $516 million exceeded expectations, up 33% year over year.
BlackRock’s recent acquisitions, including HPS Investment Partners and Preqin, bolstered its performance. Technology services revenue climbed 28% to $515 million following the acquisition of Preqin in March. The firm’s long-term target of at least 5% organic base fee growth is in line with its performance, with potential for even higher growth rates in the future.
The market sees BlackRock’s pursuit of growth beyond traditional stock and bond funds paying off, with the stock outperforming the S&P 500. CEO Larry Fink’s vision for the firm as a “one-stop shop” asset manager offering a variety of investment products is reinforced by the strong third-quarter results. BlackRock is well-positioned for continued growth in the future. Investors are closely monitoring expense growth at BlackRock as total expenses rose 26% year over year. Despite an adjusted operating margin of 44.6%, some analysts noted it fell below expectations. Concerns arose over a big outflow from an institutional client in the index business, but it was offset by a $30 billion Dutch pension fund. Subscribers to CNBC’s Investing Club with Jim Cramer receive trade alerts before he makes a move, with specific waiting periods after discussing a stock on TV. No guaranteed outcome or profit is promised.
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1. Apple announces new iPhone 13 models with improved cameras, faster chips, and longer battery life. The new iPhones will start at $699 and go up to $1,099 for the Pro Max model. Preorders begin on Friday.
2. The Federal Reserve is expected to announce plans to start reducing its bond purchases, signaling the beginning of the end of its pandemic-era stimulus measures. Fed Chairman Powell will hold a press conference to discuss the decision.
3. The Labor Department reports that jobless claims fell to 310,000 last week, the lowest level since the start of the pandemic. This indicates a strengthening job market as more Americans return to work amid the economic recovery.: BlackRock’s move into new markets pays off, sending shares to a new high