BlackRock Q1 profit beats estimates as assets rebound above US$6t

New York

BLACKROCK Inc, the world's largest asset manager, reported first-quarter profit that exceeded expectations and raked in US$65 billion of new investor cash as global financial markets rebounded from a volatile fourth quarter.

Total assets under management grew 3 per cent to $6.52 trillion in the quarter through March 31 from a year earlier, amid a broad-based rebound in global equity markets. Assets had dipped below US$6 trillion amid market turmoil late last year.

Total quarterly net inflows across all product types jumped 13.6 per cent to US$64.67 billion from a year earlier.

Overall, the company sold US$59 billion in stock, bond and other "long-term" investment funds, up from the US$43.6 billion in the quarter ended Dec 31.

BlackRock shares were up 2.2 per cent at US$461.56 in early trading.

The US economy is speeding up again after a slowdown and the market is getting ready for "huge" inflows into stocks, BlackRock Inc's chief executive Larry Fink told Reuters in an interview on Tuesday.

"I believe people are still under-risked, despite the big rebound," Mr Fink said.

The benchmark S&P 500 stock index, which sank 14 per cent in the final three months of 2018, rebounded by 13 per cent in the first quarter, its best performance since the third quarter of 2009.

BlackRock lost more than US$26 billion in its equity portfolio during the first quarter, but this was more than offset by a jump in fixed income of nearly US$80 billion. Long-term investments rose by US$59 billion.

"Investment flows look stronger than we anticipated," said Kyle Sanders, an analyst with St Louis-based financial services firm Edward Jones.

"BlackRock has a really strong reputation in fixed income management and it looks like that asset class came back into favor with interest rates kind of dipping lower. I think that drove better-than-expected asset flows," saidMr Sanders.

Institutional fund net inflows grew nearly nine-fold to US$29.12 billion from a year ago.

Net income attributable to BlackRock fell to US$1.05 billion, or US$6.61 per share, in the first quarter, from US$1.09 billion, or US$6.68 per share, a year earlier. That well exceeded analysts' expectations for a profit of US$6.13 per share, according to IBES data from Refinitiv. REUTERS