Industry Updates

BlackRock First Quarter reporting shows assets of $3.36tln, net income of $423m

Monday, April 26, 2010

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Opalesque Industry Updates - BlackRock, Inc. reported first quarter 2010 net income1 of $423 million, up $339 million compared to first quarter 2009. Operating income was $654 million and non-operating expense, net of non-controlling interests, was $3 million. The operating margin was 32.8%, which included the effect of $52 million of pre-tax Barclays Global Investors (“BGI”) integration costs.

First quarter net income, as adjusted2, was $2.40 per diluted common share, or $469 million, up 196% compared to first quarter 2009 diluted EPS of $0.81 and up $0.01 compared to fourth quarter 2009. The comparison to the fourth quarter reflects a 24% increase in net income. The first quarter 2010 reflects the first full quarter of the BGI acquisition, which closed on December 1, 2009. The first quarter 2010 EPS also reflects the full effect of the issuance of new shares in December 2009 associated with the acquisition of BGI. BlackRock’s results reflect the acquisition of BGI, a diverse mix of products across assets under management (“AUM”) and clients, improvements in external capital markets and industry flow trends including strong flows into index products.

Revenue was $1,995 million, up 102% compared to first quarter 2009 and 29% compared to fourth quarter 2009. First quarter 2010 revenue included $1,753 million of base fees, which included the full quarter effect of acquired BGI AUM, revenue associated with $63 billion of growth in long-term AUM and net market appreciation and $50 million of performance fees in first quarter 2010.

First quarter 2010 included as adjusted2 operating income of $2.42 per diluted share and as adjusted2 net non-operating expense of $0.02 per diluted share. Operating income, as adjusted2, of $727 million improved $420 million, or 137%, compared to first quarter 2009 and $166 million, or 30%, compared to fourth quarter 2009, benefiting from the BGI acquisition and continued growth in long-dated AUM. The operating margin, as adjusted2, for first quarter 2010 remained strong at 38.9%, reflecting the effect of BGI and the commencement of additional strategic investments to grow the franchise.

First quarter 2010 net non-operating expense, as adjusted2, of $6 million included $30 million of net gains on investments as well as the effect of a full quarter of interest expense on our $2.5 billion long-term note issuances in December 2009. Source

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