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BlackRock earnings Q2 2017

BlackRock, the largest asset manager in the world, posted second-quarter earnings and revenue that missed expectations.

The company posted second-quarter adjusted earnings per share of $5.24 on revenue of $2.965 billion.

BlackRock shares slipped 0.3 percent in the premarket following the report’s release.

The firm’s second-quarter assets under management rose 16 percent year over year to $5.689 trillion, topping analyst expectations.

BlackRock also said assets under management for its exchange-traded fund business iShares topped $1.5 trillion, helped by record net inflows of $74 billion. BlackRock also saw long-term net inflows of $104 billion.

Revenue from investment advisory, administration fees and securities lending rose to $2.675 billion, roughly in line with expectations.

Here’s what Wall Street was expecting from the company’s results:

  • EPS: $5.40 expected by Thomson One analysts’ consensus.
  • Revenue: $3.019 billion expected by Thomson One.
  • Assets under management: $5.66 trillion expected by StreetAccount.
  • Advisory, administration fees and lending revenue: $2.7 billion expected by StreetAccount.
  • Net inflows: $86 billion expected by StreetAccunt.

“While significant cash remains on the sidelines, investors have begun to put more of their assets to work,” CEO Larry Fink said in a statement. “I have never seen more opportunity than I do today for BlackRock to help investors achieve their financial goals. As we look to provide increased value both for clients and shareholders, we will continue to strategically invest for enhanced growth going forward.”

Shares of the asset management firm have outperformed the broader stock market and the financials sector this year.

In that time period, BlackRock’s stock has risen 15 percent, while the S&P 500 and the Financials Select Sector SPDR exchange traded fund have risen 9.8 percent and 6.9 percent, respectively.

BlackRock (blue) vs. S&P 500 (green) and XLF (purple) in 2017

Source: FactSet

The company had reported first-quarter results that beat Wall Street’s estimates on April 19.

BlackRock reported its iShares ETFs saw then-record inflows of $64 billion during the first quarter, capturing the No. 1 share of ETF industry flows globally.

Earlier this year, the company announced it would use more computers to pick stocks as part of its efforts to overhaul its active management business.

“We are reorienting some of the humans’ jobs in terms of doing more data science and data analysis,” Fink said on “Squawk Box” on April 6. “We’ll have the same amount of employees in our equity division a year from now that we do today.”

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