Shares of BlackRock Inc. (BLK, Financial), the world’s largest asset manager, were down 1.1% before the opening bell on Monday despite reporting solid second-quarter earnings.
The New York-based investment management company posted adjusted earnings per share of $6.66, topping Thomson Reuters’ expectations of $6.55. Revenue grew 11% from the prior-year quarter to $3.6 billion, beating estimates of $3.5 billion.
The company attributed its revenue growth to base fees, performance fees and technology services revenue. Earnings were boosted 28% as a result of a lower corporate tax rate.
In addition, BlackRock reported assets under management grew 11% to $6.29 trillion. This fell short of the $6.37 trillion expected, however.
In a statement, Chairman and CEO Laurence Fink noted that the industry is experiencing a slowdown in net flows as investors grow ever more uncertain in the current market environment, which is being intensified as the trade war between the U.S. and several other countries rages on.
Net inflows for the quarter totaled $20 billion, with long-term inflows of $14.5 billion. This was well below Wall Street’s estimates of $38 billion. In addition, institutional investors saw an outflow of $8.8 billion, while retail investors collected $5.5 billion and BlackRock’s iShares business raked in $17.8 billion.
Despite this headwind, Fink assured investors its “dialogue with clients and opportunities to provide long-term solutions are more robust than ever before.”
“We have seen markets like these before, and BlackRock’s product breadth, unparalleled portfolio construction capabilities, digital tools and technology uniquely position us to deliver long-term value to clients and shareholders,” he added.
With a market cap of $81.11 billion, BlackRock was trading around $503.39, down 0.73%, on Monday morning with a price-earnings ratio of 15.89, a price-book ratio of 2.54 and a price-sales ratio of 6.22.
GuruFocus estimates the stock has fallen approximately 3% year to date.
Disclosure: No positions.
