BlackRock, the largest asset manager in the world, reported quarterly earnings and revenue that missed analysts’ expectations on Wednesday as a market downturn late last year eroded its asset base.
Earnings for the asset manager fell nearly 60 percent to $927 million over the past year. On an adjusted basis, earnings per share were $6.08, falling short of analyst expectations of $6.27 per share. BlackRock’s adjusted reported bottom line represents a 2 percent decline from the year-earlier period, when its posted a profit of $6.19 per share.
The company’s 2017 fourth quarter income tax benefit included $1.2 billion of net tax benefit related to the Tax Cuts and Jobs Act and included an $84 million discrete tax benefit.
BlackRock’s closely-followed assets under management totaled $5.98 trillion at the end of the quarter, a 5 percent decline over the past 12 months and a 7 percent slip from the prior quarter. However, CEO Larry Fink told CNBC’s “Squawk Box” on Wednesday that since the end of the quarter, the company’s assets under management had inched back above $6 trillion.
“We had huge equity declines in the fourth quarter, we had commodity declines. We had about a 5 percent decay in our asset base, not because of outflow, but because the market fell,” Fink said on Wednesday. “We all know the fourth quarter was a pretty severe down graph in the equity markets and that reflects in our net asset value, but we had organic growth unlike the majority of the industry.”
Shares dipped about 1.5 percent in premarket trading following the earnings release.
Sales at the financial giant totaled $3.434 billion, missing analyst expectations of $3.516 billion, a 9 percent slump from the fourth quarter of 2017. Revenue from its advisory, administration and lending business fell to $2.8 billion, a decline of $118 million over the last year.
The company’s board of directors approved an increase in its quarterly cash dividend, bumping it to $3.30. The financial giant also saw record quarterly inflows of $81 billion in its iShares business as the high-growth exchange-traded fund segment continues to expand. The firm saw $50 billion of fourth quarter total net inflows and $124 billion of full-year inflows.
The New York City-based asset manager returned $3.6 billion to shareholders in 2018, including $1.7 billion of full year share repurchases.
Still, the company’s stock is down 6.1 percent over the past three months and 27.8 percent over the past 12 months. The financial giant’s stock fell about 23 percent in 2018, underperforming the broader market. The S&P 500 fell 6.23 percent in 2018.