BlackRock first-quarter profit falls 20 percent

[April 14, 2016]  By Trevor Hunnicutt and Sudarshan Varadhan

(Reuters) - BlackRock Inc, the world's largest asset manager, posted a 20 percent drop in first-quarter profit on Thursday amid a dramatic reversal in financial markets. The New York-based company's net income fell to $657 million, or $3.92 per share, in the quarter, from $822 million, or $4.84 per share, a year earlier.

BlackRock attracted total long-term net inflows of $36.08 billion in the quarterly period, down from $70.44 billion in the same quarter of 2015.

On an adjusted basis, BlackRock earned $4.25 per share, falling short of the average analyst estimate of $4.29, according to Thomson Reuters I/B/E/S.

Chief Executive Officer Larry Fink attributed a portion of the decline to lower fees collected on investment products, such as hedge funds.

"The Street was anticipating higher performance fees," Fink said on CNBC television. "That's where the miss was."

In the last quarter of 2015, the company took in $54 billion into its funds despite weak and turbulent markets, driving profits higher. But the company nonetheless missed Wall Street analysts' expectations for that quarter.

BlackRock's iShares exchange-traded funds (ETFs) business took in $24.25 billion in new money in the latest quarter, down from $35.48 billion a year earlier.

The lion's share invested in ETFs went into bonds as U.S. markets began the year with one of their roughest starts ever only to regain their footing in February.

Net investment in fixed income was $52.17 billion, while $2.15 billion went into alternative investments.

BlackRock ended the quarter with $4.74 trillion in assets under management, up from $4.65 trillion at the end of 2015.

Up to Wednesday's close of $348.29, BlackRock's shares had risen about 2.3 percent since the start of the year.

BlackRock's stock traded nearly 5 percent lower at the end of 2015 than at the end of 2014, while a grouping of similar companies measured by the Dow Jones U.S. Asset Managers Index fell by 12 percent. Over the year, the stock returned negative 2.3 percent, a figure that includes dividend payouts.

(Reporting by Sudarshan Varadhan in Bengaluru and Trevor Hunnicutt in New York; Editing by Anil D'Silva and Jeffrey Benkoe)

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