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BlackRock declared revenue of $3.65 billion in Q2, 3.7% higher than in the same period last year. After the positive results, BLK stock is slightly up in the pre-market.
The company declared that in the second quarter of 2020 its revenue was $3.65 billion which means that the figure has beaten the expectations by $100 million. As for year-to-year growth, it is positive as the revenue has increased by 3.7%.
Non-GAAP EPS reported is $7.85 which is $0.90 higher than expected while GAAP EPS with a figure of $7.85 is $1.05 higher than it was projected.
The Q2 earnings are $1.21 billion. That means the earnings jumped by 22%. In Q2 2019, the figures were $1.00 billion and $6.41 per share respectively. Net flow however fell due to coronavirus pandemic impact to the, already uncertain, market. It is also important to add that the earnings increase somewhat showed a lower share count after BlackRock bought back some of PNC Financial Services’ (PNC) massive stake in the asset manager.
PNC Profit Doubles
Just for reminder, this week, PNC said its second-quarter profit more than doubled as it sold its longtime, 22% stake in BlackRock. BlackRock’s effective tax rate went down to 22.9% during the quarter from 23.2% the previous year. The company’s tax rate fell after BlackRock gave a $589 million to the charity, meaning to its foundation in the first quarter to fund future philanthropic investments “focused on promoting sustainability and economic mobility, and building a financial safety net for underserved and underemployed people.”
The company also went on to repurchase $1.1 billion of shares during the second quarter, and its weighted-average diluted shares fell 1% to 15.7 million shares during the quarter. Bloomberg analysts had, for example, estimated BlackRock to report second-quarter earnings of $6.96, with estimates ranging from $6.37 to $7.61.
Yesterday BLK stock was 0.29% down, at $566.96. Today, at the time of writing, BLK stock was 3.82% down, at $588.64 at 12:46 pm ET.
As of June 30, 2020, the sum of assets being managed by BlackRock on behalf of investors from all over the world was around $7.32 trillion.
Analyst Kyle Sanders of Edward Jones stated:
“This was a beneficial move for shareholders, given the purchase price was 36% lower than BlackRock’s current share price of $566. Historically, BlackRock has been very opportunistic during fragile markets and we anticipate the company will continue to utilize its strong financial condition to invest in new products, distribution and technology over the next few quarters to widen the competitive gap over peers.”
More Partnerships in Future
Be it as it may, even though the market seems to be pretty volatile, net flows plunged. Flows into BlackRock funds totaled $100.22 billion during the quarter, down from $150.99 billion a year earlier. Second-quarter inflows were led by fixed income and cash management, BlackRock said.
BlackRock CEO Larry Fink stated that amidst great uncertainty about the future, BlackRock’s “unique insights, guidance and comprehensive investment solutions…[are] leading to deeper partnerships, and we’re seeing clients entrust BlackRock with a greater share of their assets.”
“Clients are turning to BlackRock more than ever before as they face increasing uncertainty about the future, and we are bringing together the entirety of our differentiated platform to help them. Clients are relying on BlackRock for our unique insights, guidance and comprehensive investment solutions. This is leading to deeper partnerships, and we’re seeing clients entrust BlackRock with a greater share of their assets.”
The illustrations were provided by Depositphotos.com