Categories Earnings, Finance, U.S. Markets News

Earnings preview: Higher costs likely to dampen BlackRock’s Q4 results

BlackRock Inc. (BLK) will report earnings results for the fourth quarter of 2018 on Wednesday, January 16. Wall Street expects the company to report earnings of $6.53 per share on revenues of $3.61 billion, reflecting year-over-year increases of 4.6% and 4.1% respectively. The company has consistently topped earnings estimates over the past four quarters.

BlackRock is likely to benefit from strong iShares inflows this quarter, which could help drive total net inflows. The momentum in net inflows can lead to an improvement in total assets under management (AUM) for the quarter. The company is also likely to benefit from higher performance fees for the period.

However, higher expenses, primarily from marketing and other product investments, are likely to dampen results slightly. The financial sector has been pressured by a slowdown in the economy as well as the trade war.

In the third quarter, BlackRock topped earnings estimates but missed on revenues. Revenues rose 2% year-over-year to $3.5 billion while adjusted EPS grew 27% to $7.52. AUM increased 8% to $6.4 trillion.

BlackRock stock falls on weak Q3 revenue

BlackRock’s peers JPMorgan Chase and Citigroup are also reporting their results this week. On Monday, Citigroup reported better-than-expected fourth-quarter earnings but missed on revenues. JPMorgan will report fourth-quarter results on Tuesday. As of 3:00 pm ET, BlackRock’s stock was down 0.8%.

 

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