BlackRock quarterly profit sails past estimates as markets rally
BlackRock Inc, the world's largest asset manager, trounced analysts' profit estimates for a fifth straight quarter on Tuesday as the recovery rally in global financial markets boosted asset values and pulled in more investor funds. The company ended the third quarter with $7.81 trillion in assets under management, up from the $7.32 trillion in the second quarter and $6.96 trillion a year earlier.
Financial markets rallied in the third quarter, building on a dramatic rebound in the second from the pandemic-fueled low hit in March, as an accommodative stance from global central banks and improving growth prospects lifted risk appetite. Still, investors remained cautious ahead of the U.S. presidential election on Nov. 3 and data underlining the uneven economic recovery against the backdrop of a resurgence in coronavirus cases around the world.
The New York-based company's net income rose 27% to $1.42 billion, or $9.22 per share, in the third quarter ended Sept. 30, from $1.12 billion, or $7.15 per share, a year earlier.
Analysts had expected earnings of $7.80 per share, according to IBES data from Refinitiv. BlackRock's performance fees jumped more than four-fold from a year earlier. Net inflows in the quarter totaled $129 billion, the company said, compared with $100 billion in the prior quarter. More than 50% of the company's long-term inflows were driven by clients in Europe and Asia.
The asset manager's fixed-income funds took in $70.36 billion in new money, while its cash-management business attracted $27.8 billion in net inflows in the third quarter.
Meanwhile, Tesla Inc said on Tuesday it has cut the price of its Model S "Long Range" sedan by 4% in the United States, days after the electric-car maker reported record quarterly deliveries. The company, which is expected to report thirdquarter results on Oct. 21, cut the price to $71,990 from $74,990 in the United States. It also trimmed the starting price of Model S by 3% in China. (bit.ly/34PqCew)
Earlier this month, the carmaker cut the starting price of its Chinesemade Model 3 sedans by about 8% to 249,900 yuan ($36,805). Tesla said it delivered 139,300 vehicles in the third quarter, an all-time record, yet shares fell as some analysts doubted if Tesla could hit its ambitious year-end target. Shares of the automaker, which have surged more than five times this year, were up nearly 1% at $445.25 in premarket trading.
Earlier, Johnson & Johnson JNJ.N hiked its full-year profit forecast for the second time in 2020, as strong demand for its cancer and Crohn's disease treatments largely offset the impact to its businesses from the COVID-19 pandemic.
The strong third-quarter results come a day after the company said it had temporarily paused its COVID19 vaccine candidate clinical trials due to an unexplained illness in a study participant, delaying one of the highest profile efforts to contain the global pandemic.
In the third quarter, sales rose to $21.08 billion from $20.73 billion, helped by rise in sales of its cancer drugs Darzalex and Imbruvica, as well as Crohn's disease drug Stelara. The company expects full-year 2020 adjusted profit of $7.95 to $8.05 per share, from its prior range of $7.75 to $7.95 per share.