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BlackRock profit rises in volatile quarter, shares up

Reuters  |  NEW YORK 

By Trevor Hunnicutt

(Reuters) - Inc reported a greater-than-expected increase in profit on Thursday, helped by strong demand for the world's largest asset manager's in a volatile first quarter.

A fresh infusion of cash from investors, combined with favorable currency movements, boosted BlackRock's revenue from managing money and offset growth in expenses and compensation.

It also benefited from a lower tax rate following the $1.5 trillion overhaul passed late last year, which cut the corporate rate.

shares climbed 2.4 percent on Thursday. In the last year, the stock is up more than 41 percent compared with an 18.5 percent rise for a index that includes more than a dozen of its rivals in the

BlackRock's results showed the company's evolution from a traditional fund manager, whose profits typically decline when markets stumble, into a steadier financial operation.

"I'm viewing this more as a firm than a traditional asset manager," said

Markets swung wildly during the first quarter, as investor enthusiasm over U.S. corporate tax cuts was blunted by concerns about inflation, a global trade war and policy. Stock and bond funds declined.

Nonetheless, BlackRock's profits grew. The company is known for its iShares-brand exchange-traded funds (ETFs) that track markets or themes, for companies, Chinese stocks or bonds.

The products can be managed cheaply at scale, and have taken market share from trading in single stocks as well as pricier funds managed by stockpickers and financial derivatives like futures.

In the most recent quarter, ended March 31, attracted nearly $57 billion, including $34.7 billion into the ETFs. The ETF figure was down from $64.5 billion a year earlier, reflecting investors' skittishness.


said the company's institutional clients reacted dramatically to market turbulence by moving cash into the bond market, selling investments to fund other investments, share buybacks or acquisitions.

"It's better to be in this atmosphere," Fink told "We have always differentiated ourselves in more volatile times as we did in the financial crisis."

BlackRock, which Fink co-founded in 1988, bought iShares from in the wake of the global financial crisis of 2007-2009, making the company into a colossus. Assets under management were $6.32 trillion at the end of the quarter.

In addition to using to improve investment performance, boost its sales and automate routine functions, the company also licenses its internal to clients and competitors and breaks them out on a different revenue line.

Fink told he expects revenue to grow at mid-teen percentages. Earlier this year, the company opened an laboratory in California's Silicon Valley and added to its board of directors.

Total revenue rose 15.9 percent to $3.6 billion from the same quarter in 2017, while expenses rose just 9.8 percent to $2.2 billion.

Overall, the New York-based company's net income rose to $1.09 billion, or $6.68 per share, in the quarter. That figure is 28 percent higher than $859 million, or $5.21 per share, a year earlier.

Excluding compensation expenses that said do not affect its book value, earned $6.70 per share. Analysts on an average expected to report $6.39 per share, according to I/B/E/S.

(Reporting by Trevor Hunnicutt; Additional reporting by Diptendu Lahiri in Bengaluru; Editing by and Bernadette Baum)

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

First Published: Thu, April 12 2018. 22:46 IST