BlackRock (BLK) Q3 Earnings Beat, Revenues & AUM Rise Y/Y

BlackRock, Inc.’s BLK third-quarter 2020 adjusted earnings of $9.22 per share hugely surpassed the Zacks Consensus Estimate of $7.81. The figure reflects a rise of 29% from the year-ago quarter’s number.

Results benefited from an improvement in revenues, partly offset by higher expenses. Further, long-term net inflows resulted in a rise in assets under management (AUM) balance, which was a major positive for the company.

Net income attributable to BlackRock (on a GAAP basis) was $1.36 billion, up 21.9% from the prior-year quarter.

Revenues Improve & Expenses Rise

Revenues for the reported quarter (on a GAAP basis) were $4.37 billion, increasing 18.3% year over year. The upside stemmed from an increase in almost all components of revenues, except for advisory and other revenues. Moreover, the reported figure surpassed the Zacks Consensus Estimate of $3.92 billion.

Total expenses amounted to $2.61 billion, up 19.3% from the year-ago quarter. The rise was due to an increase in all cost components except for costs related to the amortization of intangible assets.

Non-operating income (on a GAAP basis) was $224 million against non-operating expenses of $42 million recorded in the year-ago quarter.

BlackRock’s adjusted operating income was $1.76 billion, up 17% year over year.

Net Inflows Support AUM Growth

As of Sep 30, 2020, AUM totaled $7.81 trillion, reflecting a rise of 12.1% year over year. In the reported quarter, the company witnessed long-term net inflows of $98 billion.

Our Viewpoint

BlackRock’s continued efforts to strengthen the iShares and ETF operations along with its initiatives to restructure the actively managed equity business are expected to continue to boost the top line and AUM, going forward. Moreover, its inorganic growth efforts bode well for the future.

BlackRock, Inc. Price, Consensus and EPS Surprise

BlackRock, Inc. price-consensus-eps-surprise-chart | BlackRock, Inc. Quote

BlackRock currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Earnings Release Schedule of Other Finance Companies

Community Bank System CBU is scheduled to release quarterly results on Oct 26, while Atlantic Capital Bancshares ACBI will report earnings on Oct 22.

Waddell & Reed Financial, Inc. WDR is slated to report results on Oct 27.

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