BlackRock earnings Q3 2018

BlackRock, the largest asset manager in the world, reported better-than-expected earnings for the third quarter on Tuesday as its assets under management grew by 8 percent on a year-over-year basis.

The asset-management giant posted adjusted earnings per share of $7.52, while analysts polled by Refinitiv expected a profit of $6.84. BlackRock’s reported bottom line represents a 27 percent jump from the year-earlier period, when its posted a profit of $5.90 per share.

BlackRock’s earnings got a boost from lower taxes. The company’s effective tax rate dropped to 16 percent from 30.6 percent a year ago.

The company’s assets under management grew to $6.444 trillion in the third quarter from $5.976 trillion in the third quarter of 2017. Assets also grew by 2.3 percent from $6.299 trillion in the second quarter.

BlackRock’s assets growth was driven by its iShares business, which saw inflows of $33.7 billion. Overall, long-term net inflows for BlackRock totaled $10.6 billion in the third quarter.

Still, the company’s assets under management fell slightly short of a $6.498 trillion estimate as BlackRock’s index funds and active management businesses experienced a combined $24.8 billion in outflows. Cash management net outflows also hit $14.6 billion in the quarter.

CEO Larry Fink told CNBC’s “Squawk Box” on Tuesday that the company saw massive outflows before a more than 4 percent drop in the S&P 500 last week.

There’s a huge commentary that we are at peak earnings,” Fink said, adding that commentary is debatable, and the firm expects “we have a couple more good quarters.”

Its revenue of $3.576 billion fell short of a $3.648 billion forecast. Sales from BlackRock’s advisory, administration and lending business hit $2.88 billion, below a StreetAccount estimate of $2.97 billion.

The stock fell 2.7 percent in the premarket. BlackRock shares are down sharply this year, falling more than 16 percent in 2018 through Monday’s close. Meanwhile, the S&P 500 is up nearly 3 percent year to date.

The report comes after BlackRock completed in late September the acquisition of Citibanamex’s asset management business, which has about $34 billion in assets.