BlackRock, which is in the midst of being acquired by Merrill Lynch, announced that its profit grew 18.9% in the second quarter on strong fund performance and rising assets under management.
BlackRock said it earned $63.4 million, or 95 cents per share, compared with $53.3 million, or 80 cents a share, the year earlier.
Adjusted earnings per share, excluding costs related to the pending Merrill merger, were $1.19 per share. Analysts sampled by Thomson First Call had expected $1.17. Revenue grew 32.9% in the quarter, to $360.7 million, and assets under management rose nearly 12%, to $464.1 billion. In February, BlackRock agreed to swap a 49.8% stake in the company for Merrill's investment management division - a move that would let its assets under management top $1 trillion.
Denise Valentine, a senior analyst at Celent, a Boston financial research and consulting firm, said BlackRock continues to manage its capacity by closing small-cap funds to new investors and is likely to merge or combine select Merrill and BlackRock portfolios.
"BlackRock is humming along," she said. "Significant earnings increases came from the institutional side of the business, particularly in alternatives and performance-based fees. New business is robust, given the inevitable market pause for the Merrill transaction - and a strong statement of investor confidence.
Non-U.S. investor new business, an important diversification factor for a firm of this size, was $10 billion year-to-date. Further, BlackRock's acquisition of Nomura's share of their Japan [joint venture] must be received as a direct statement of its intention to pursue Asian business."
