BlackRock, Inc. (NYSE: BLK) stock fell over 1.2% on Jan 15th, 2021 (as of 1:17 pm GMT-5; Source: Google finance) after the company gave muted guidance though beaten the company’s earnings estimate for the fourth quarter of FY 20. Assets under management rose to $8.68 trillion at the end of the quarter, from $7.43 trillion a year earlier. The Increased volatility in the quarter, which came from the U.S. presidential elections and the release of several Covid-19 vaccines, saw investors piling into BlackRock’s exchange-traded funds, as well as active funds that aim to beat the market. A mix of accommodative monetary policy and optimism over increased stimulus measures have seen global equities scaling record highs since end-2020, with investors betting on a steady economic recovery in 2021. Long-term investment flows at BlackRock grew $116.2bn in the period, with fixed income accounting for $62.7bn and equity funds swelling by $48.1bn.
BLK in the fourth quarter of FY 20 has reported the adjusted earnings per share of $10.18, beating the analysts’ estimates for the adjusted earnings per share of $9.17, according to Zacks Investment Research. BlackRock’s fourth-quarter operating margin was 46.6 per cent, which shy of its record 47 per cent set during the preceding quarter. During the company’s earnings call that the operating margin for 2021 is expected to remain in line with 2020. The company had reported the adjusted revenue growth of 13 percent to $4.48 billion in the fourth quarter of FY 20, beating the analysts’ estimates for revenue of $4.31 billion. The company attracted $391bn of total net inflows during 2020, due to organic growth of 5% and including $185bn of net inflows into iShares, its exchange traded fund business. Technology services revenues rose 11% from a year ago to a record $1.1bn.
Moreover, Investment advisory, administration fees and securities lending revenue rose $304 million from the fourth quarter of 2019 and $168 million from the third quarter of 2020, mainly due to organic growth and the positive impact of market beta and foreign exchange movements on average AUM, partially offset by the impact of fee reductions on certain products and lower securities lending revenue. Technology services revenue increased $31 million from the fourth quarter of 2019 and $23 million from the third quarter of 2020, primarily reflecting higher revenue from Aladdin. Advisory and other revenue fell $58 million from the fourth quarter of 2019, on the back of the previously announced charitable contribution of BlackRock’s remaining 20% stake in PennyMac Financial Services, Inc. in 2020 and lower advisory and transition management assignments in the current quarter.