BlackRock's portfolio rose 16% in the second quarter, but earnings miss

Larry Fink Interview Pic

BlackRock, the world's largest asset manager, posts second-quarter earnings and revenue that miss expectations.

The world's largest asset manager reported second-quarter adjusted earnings per share of $5.24 on revenue of $2.965 billion. In the year-earlier period, the company had posted adjusted earnings of $4.78 per share on sales of $2.804 billion.

BlackRock shares fell 2.8 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 a side-by-side comparison of the company's results against Wall Street's expectations:

  • EPS: $5.24 vs $5.40 expected by Thomson Reuters analysts' consensus.
  • Revenue: $2.965 billion vs $3.019 billion expected by Thomson Reuters.
  • Assets under management: $5.689 trillion vs $5.66 trillion expected by StreetAccount.
  • Advisory, administration feesand lending revenue: $2.675 billion vs $2.7 billion expected.
  • Net inflows: $104 billion vs $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 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.

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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