BlackRock Inc., the world’s biggest money manager, reported third-quarter earnings that beat analysts’ estimates as exchange-traded funds drew client deposits and assets rose.
Net income climbed 7.9 percent to $642 million, or $3.65 a share, from $595 million, or $3.23, a year earlier, the New York-based company said today in a statement. Excluding certain one-time items, profit of $3.47 per share exceeded the $3.32-a- share average estimate of 19 analysts surveyed by Bloomberg.
Chief Executive Officer Laurence D. Fink has cut costs of some ETFs to fend off competition and urged investors to get back into equities as they’ve remained concerned by Europe’s sovereign-debt crisis and slowing economic growth worldwide. Assets rose 9.8 percent compared with a year earlier to $3.67 trillion as net client redemptions of $55 billion were offset by market gains of $134 billion during the quarter.
“They struggle a little bit with active equity flows,” Luke Montgomery, a research analyst who covers asset managers at Sanford C. Bernstein & Co. in New York, said in an interview before the earnings were announced. “On the ETF side, it’s a fast-growing market, but they’ve been losing market share to Vanguard.”
Investors poured $25.2 billion into the iShares ETFs, the most since BlackRock’s acquisition of the unit from Barclays Plc in 2009, while removing $5.1 billion from active stock funds during the quarter. BlackRock said a single institutional investor pulled more than $72 billion from a fixed-income portfolio, after the firm didn’t want to rebid for the business at lower fees.
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