BlackRock, Inc. (NYSE: BLK) in the fourth quarter of FY 17 has posted better than expected results as the investors invested heavily into the world’s biggest asset manager’s exchange-traded funds. Further, BLK crossed the $6 trillion asset mark in the fourth quarter and the net income has increased by $1.2 billion related to the tax legislation as well as flows into exchange-traded funds last year. The company has witnessed the strongest net flows in its history last year, which is $367 billion. BLK has witnessed long-term net inflows of $7.4 billion from clients in the Americas, EMEA and Asia-Pacific, respectively. At December 31th, 2017, BLK has managed 63% of its long-term AUM for clients in the Americas, 29% for clients in EMEA and 8% for clients in Asia-Pacific. The company in the fourth quarter has witnessed 22 percent growth in assets under management from $5.98 trillion at the end of the third quarter. The company’s iShares ETF business took in $54.8 billion in new money in the fourth quarter, up from $49.3 billion a year earlier. Overall in the fourth quarter, the net income grew $2.3 billion from $851 million, a year earlier.
Moreover, the new tax law has put a $10,000 limit on state and local deductions, and has reduced the corporate rate to 21 percent from 35 percent. The new tax reform will drive more money into investment products and increase the stock and bond prices even higher. As per the analysts, BLK’s effective tax rate is expected to fall to about 25 percent from about 31 percent, which will likely boost the company’s profitability 6 percent to 7 percent this year. Overall, due to the reduction of tax rate, the GDP will pick up, which will flow into asset values and higher savings.
BLK in the fourth quarter of FY 17 has reported the adjusted earnings per share of $6.24, beating the analysts’ estimates for the adjusted earnings per share of $6.02, as per Thomson Reuters.
Additionally, the company has raised its quarterly cash dividend by 15 percent to $2.88 per share, payable March 22nd, 2018, to shareholders of record at the close of business on March 7th, 2018.
BLK stock has risen 2.8% this morning (as of 11:11AM EST on Jan 12th, 2018) leading to 46% in the last one year (source: Google Finance).