BlackRock Tops Views, Confirms Merrill to Keep Stake

U.S. money manager BlackRock posted a better-than-expected 23 percent rise in second-quarter profit as assets under management rose.

BlackRock's headquarters in New York.
Mark Lennihan
BlackRock's headquarters in New York.

BlackRock , the largest publicly traded asset management company in the United States, also confirmed that U.S. investment bank and brokerage Merrill Lynch had decided not to sell any of its 49.8 percent stake in BlackRock. A source familiar with the situation told CNBC on Wednesday that Merrill had decided to retain its stake in BlackRock.

"Merrill Lynch decided not to sell any of their stake in BlackRock, and we jointly agreed to extend and strengthen our global distribution agreement," BlackRock Chairman and Chief Executive Laurence Fink said in a statement.

During a conference call, Fink added that BlackRock had extended its global distribution agreement by four years beyond 2009. The agreement had been set to expire in September 2009.

BlackRock's second-quarter net income rose to $274 million, or $2.05 per share, from $222 million, or $1.69 a share, in the same quarter of last year.

BlackRock said after adjusting for compensation plan costs, partially funded by Merrill and other major shareholder PNC Financial Services , net income totaled $285.3 million, or $2.14 per share.

Analysts had expected earnings of $1.97 per share, according to Reuters Estimates.

PNC owns a 34 percent stake in BlackRock.

Assets under management, the main driver of revenue and profit at money managers, rose to $1.43 trillion at end-June from $1.23 trillion a year ago.

BlackRock shares, which closed at $178.95 on Wednesday, are down 17.5 percent so far in 2008, partly due to concerns that Merrill will sell its stake.