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BlackRock earnings top Wall Street’s expectations as firm boosts dividend

BlackRock, the world's largest asset management firm, reported mixed fourth-quarter results on Friday, as earnings exceeded analyst expectations while revenue barely missed.

The company posted adjusted earnings per share of $5.14, helped by lower expenses and a rush into low-cost exchange-traded funds, while revenue totaled $2.890 billion. Analysts polled by Reuters expected adjusted earnings per share of $5.02 and revenue of $2.928 billion.

BlackRock also raised its quarterly dividend by 9 percent to $2.50 per share from $2.29, and said its assets under management rose 11 percent in 2016. BlackRock stock rose more than 1.5 percent Friday.

"Probably the most significant component of the quarter is our $98 billion in net flows," CEO Larry Fink said in an interview with CNBC's "Squawk Box" after the earnings report. "Most public asset managers that report monthly have reported negative flows for the quarter. We had extraordinarily positive flows for the quarter."

The firm's iShares exchange-traded funds saw $49.3 billion in inflows, down from $60.22 billion in the year-earlier period, according to Reuters.

BlackRock shares gained about 5 percent during the fourth quarter, lifted by a sharp postelection rally. The company's stock jumped 7.7 percent from Nov. 8 to Dec. 30.

BlackRock shares-4th quarter 2016Source: FactSet

The broader financial sector surged dramatically after President-elect Donald Trump's surprising victory, advancing 16.5 percent since Nov. 8, to lead the broader U.S. equity markets higher.

Fink said he could paint a more cautious or bullish scenario for stocks based on the execution of Trump's policies. He added that there is not enough information available about Trump's policy plans. One of the pillars of the so-called Trump rally is the expectation that Trump's policies will aid businesses through deregulation, more government spending and lower taxes.

In a release, Fink said: "While domestic equities rallied following the US election, the combination of a strengthening dollar, underperforming international equities and negative fixed income markets produced challenging outcomes for global investors."

"Investors are rethinking their approach to active management, asset allocation and portfolio construction, and we're seeing more clients use active and index strategies together to deliver returns," Fink said.

For the third quarter, BlackRock posted mixed results, beating analyst estimates on adjusted earnings per share but disappointing on revenues.