Asset management company BlackRock Inc. (BLK, Financial) reported better-than-expected fourth-quarter and full-year 2017 results on Friday and said its assets under management eclipsed $6 trillion, sending shares higher.
The New York City-based company, which is the largest asset manager in the world, posted adjusted earnings per share of $6.24 for the quarter, beating estimates of $6.02. Quarterly revenue of $3.47 billion beat expectations of $3.32 billion and increased 20% from the prior-year quarter.
Adjusted earnings for the year came in at $22.60 per share and revenue was $12.5 billion, up from $19.29 per share and $11.15 billion in 2016. BlackRock said its results were boosted by the recently passed tax reform legislation and that it received a $1.2 billion tax benefit.
The graph below illustrates the trend in BlackRock’s revenue growth over the past decade.
The company noted that its assets under management grew 22% in 2017 to surpass $6 trillion. At the end of 2016, BlackRock’s assets under management totaled $5.15 trillion. As of the third quarter of 2017, they had grown to $5.98 trillion.
The asset manager said total net inflows for the fourth quarter were $103 billion, beating expectations of $93.5 billion. Net inflows for the year were a record $367.25 billion.
Chairman and CEO Laurence Fink commented on the company’s record performance during a conference call with analysts, saying the results “reflect the long-term investments we’ve consistently made in our business to better serve clients.”
Looking ahead to 2018, Fink said, “We will continue to make investments in BlackRock’s future, to grow investment and technology capabilities, to expand our geographic footprint and to further enhance our talent so that we can ensure we meet our daily responsibility to our clients and deliver the returns to our shareholders that we all expect.”
BlackRock also increased its quarterly dividend by 15% to $2.88 per share.
With a market cap of $89.11 billion, BlackRock was trading around $552.08 on Friday with a price-earnings ratio of 25.86, a price-book ratio of 2.96 and a price-sales ratio of 7.64. GuruFocus estimates the stock is up 8% so far this year. In 2017, it gained approximately 34%.
Disclosure: I do not own any stocks mentioned.
