Financial stock under pressure: BlackRock, Inc. (NYSE: BLK)

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BlackRock, Inc. (NYSE: BLK) stock fell over 0.7% on July 16th, 2018 (as of 10:31 AM GMT-4 ; Source: Google finance) though the company reported a better-than-expected quarterly profit as client demand for index funds helped broaden the margins and the company settled into a lower tax rate. However, the asset manager cautions that inflows have slowed down as investors take a cautious approach to the markets. The net income attributable to the company increased to $1.07 billion in the second quarter, up more than 25 percent from $854 million a year earlier. The company struggled with the challenging market and industry trends during the second quarter, including an industrywide slowdown in the demand for its hottest product, exchange-traded funds (ETFs) that track markets.

Further, BLK saw outflows from equity products in the second quarter. Clients had taken out $22.4 billion from BlackRock’s equity products in the second quarter 2018. Inflows into its iShares products totaled $17.8 billion, which is the lowest since the second quarter of 2016.

BLK in the second quarter of FY 18 has reported the adjusted earnings per share of $6.66, beating the analysts’ estimates for the adjusted earnings per share of $6.57. The company had reported the adjusted revenue growth of more than 10 percent to $3.61 billion in the second quarter of FY 18, beating the analysts’ estimates for revenue of $3.6 billion. Assets under management checked in at $6.299 trillion, which is below the StreetAccount forecast of $6.372 trillion.

Moreover, during the second quarter, base fees, performance fees and technology services revenue drive BLK 11% revenue growth year-over-year. The 16% operating income growth year-over-year reflects operating margin expansion. The company did $300 million of quarterly share repurchases.

On the other hand, BLK is looking up for Cryptocurrencies market. As per London’s Financial News BLK has setup a working group tasked with investigating ways that the investment firm can enter the industry. The team will consist of different experts from departments within the company, it includes investment strategy guru Tim Simpson according to insiders. As a result, Bitcoin price jumped. Interest in bitcoin and other cryptos has dropped substantially since last year, but interest could be renewed if BlackRock actually makes a move in the space.

 

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