BlackRock Defies Market Expectations: A Deep Dive into Q3 Earnings Beating Top and Bottom Lines
BlackRock Inc. (link: NYSE), the world’s largest asset manager, reported better-than-expected earnings for the third quarter of 2021 on October 27th. Despite a challenging market environment with rising interest rates and geopolitical tensions, the company beat both top and bottom lines, sending its stock soaring in after-hours trading.
Key Highlights:
- Total assets under management (AUM) increased by 15% year-over-year to $9.5 trillion
- Net income rose by 24% YoY to $1.6 billion, or $7.03 per share
- Adjusted net income grew by 21% YoY to $1.6 billion, or $6.85 per share
- Total revenue climbed by 17% YoY to $4.6 billion
Strong Asset Growth:
BlackRock’s strong earnings can be attributed to its impressive asset growth, driven by net inflows and market appreciation. The company reported record-breaking inflows of $168 billion in the first nine months of 2021, with its iShares exchange-traded funds (ETFs) experiencing a significant uptick in demand. Additionally, BlackRock’s institutional business saw solid growth, with clients continuing to seek its expertise in areas such as sustainable investing and private markets.
Diversified Revenue Streams:
BlackRock’s diversified revenue streams also contributed to its earnings beat. While its asset management segment accounted for the majority of the company’s revenue, its iShares ETFs and systematic active equity strategies experienced robust growth. Furthermore, BlackRock’s technology solutions business, Aladdin, continued to gain traction, with revenues up 28% YoY.