Jan 14 (Reuters) - BlackRock Inc's fourth-quarter
profit beat analyst estimates on Friday, as the world's largest
money manager's fee income rose and assets under management
topped $10 trillion, but shares dipped as revenue slightly
missed Wall Street estimates.
A strong finish to the year by global financial markets
helped boost the performance of asset managers in general, with
BlackRock also benefiting from its large scale and wide reach.
Assets under management stood at $10.01 trillion at the end
of the quarter, up from $8.68 trillion a year earlier.
Its an impressive milestone and it just illustrates their
dominance in the fastest growing areas within the industry,
said Kyle Sanders, analyst at Edward Jones. They continue to
gather assets at a remarkable clip.
Net inflows for the quarter were at $212 billion, of which
long-term net flows accounted for $169 billion, up from $116
billion a year earlier.
"Our business is more diversified than ever before active
strategies, including alternatives, contributed over 60% of 2021
organic base fee growth," Chief Executive Officer Larry Fink
said in a statement.
BlackRock's revenue from investment advisory, securities
lending and administration fees, its biggest segment, rose to
$3.9 billion in the fourth quarter, helped by global dealmaking
volumes rising to a record high in 2021, crossing $5 trillion
for the first time.
Adjusted profit rose 2.5% to $1.61 billion, or $10.42 per
share, in the quarter ended Dec. 31, from $1.57 billion, or
$10.18 per share, a year earlier.
Analysts on average were expecting the company to report a
profit of $10.16 per share, according to IBES data from
Revenue rose nearly 14% to $5.11 billion, slightly below the
consensus analyst estimate of $5.17 billion.
BlackRock shares were down 1.7% to $852.66 in morning
trading. Markets have had a rocky start to the year as investors
digest the expected move by the Federal Reserve to start raising
interest rates to rein in rising inflation.
"2022 is going to be a transitional year for the entire
asset management space, said Cathy Seifert, an analyst at CFRA.
"Investors need to take a little pause and examine what is
sustainable and what is not."
BlackRock said it was targeting "record" investment in its
business in 2022, including an expected increase in headcount by
as much as 10%.
"Looking forward, they are going into investment mode
again," Sanders at Edward Jones said. "They are going to spend a
lot, and that is probably going to make it tough for them to
really have meaningful profit margin and EPS growth in 2022.
BlackRock shares rose nearly 27% last year compared with a
32% gain for the S&P 1500 asset manager and custody banks index
(Reporting by Sohini Podder in Bengaluru and Saqib Iqbal Ahmed
and Lewis Krauskopf in New York; Editing by Vinay Dwivedi and