BlackRock's Profit Jumps, Outpacing Estimates


BlackRock, the largest publicly traded U.S. asset manager, posted on Wednesday a quarterly profit that beat Wall Street estimates, helped by benefits that kicked in from last year's acquisition of Merrill Lynch's fund management unit.

BlackRock , which bought the unit last year for $9.5 billion in the biggest acquisition yet in the U.S. fund industry, said third-quarter net income rose to $255.2 million, or $1.94 per share, from $18.9 million, or 28 cents per share, a year earlier, when the company absorbed big charges from the acquisition.

Current earnings included a one-time expense that was partially offset by a one-time tax benefit but still reduced 23 cents from the earnings. Charges related to the Merrill acquisition had cut the year-ago quarter's earnings by 67 cents, it said.

Adjusting for all one-off items, earnings per share for the current quarter was $2.29 against $1.06 in the same quarter of last year, it said.

Analysts had expected the firm to post on average earnings of $1.91 for the quarter, according to Reuters Estimates.

Assets under management, a key driver of revenue at money managers, rose to $1.3 trillion at the end of September from $1.08 trillion a year ago, boosted by the Merrill unit's purchase in late September of 2006.

BlackRock saw net new asset flows of $41 billion in the current quarter. The firm's cash management products saw net inflows of $30.2 billion in the quarter due to the turbulent markets, the firm said.

"The third quarter featured widespread reassessment of valuations in the credit markets, which led to a significant reduction in liquidity and greater market uncertainty, which in turn caused investors to flock to safe havens," BlackRock's chairman and CEO Laurence Fink said in the statement.

The New York-based firm also recently completed a $1.7 billion acquisition of the fund-of-funds business of Quellos Group.

BlackRock is owned 49 percent by Merrill and 34 percent by PNC Financial Services Group . Blackrock shares, which are up about 20 percent so far in 2007, closed at $184.19 on Tuesday.