(Reuters) -BlackRock Inc reported an 18% drop in first-quarter profit on Friday but it beat analysts’ estimates as investors continued to pour money into its funds, cushioning the hit to fee income from a global banking rout that rocked financial markets.
The market rout hit BlackRock, which makes most of its money from fees on investment advisory and administration services. Still, net inflows for the first quarter were at $110 billion, compared with $86 billion a year earlier.
Stocks and bonds fluctuated wildly in the first three months of the year as investors switched from expectations of tighter monetary policy to anticipating interest rate cuts following the collapse of two U.S. regional banks in March.
“I believe today’s crisis of confidence in the regional banking sector will further accelerate capital markets growth, and BlackRock will be a central player,” said Larry Fink, chairman and chief executive of BlackRock.
BlackRock, the world’s largest asset manager, reported an adjusted profit of $7.93 per share. Analysts had estimated a profit of $7.76 per share, according to Refinitiv IBES data.
The New York-based firm ended the first quarter with $9.1 trillion in assets under management (AUM), down from $9.57 trillion a year earlier but up from $8.59 trillion in the fourth quarter.
Quarterly revenue fell to $4.2 billion from $4.7 billion.
The drop was primarily due to “the impact of significantly lower markets and dollar appreciation on average AUM and lower performance fees,” BlackRock said in a statement.
(Reporting by Jaiveer Singh Shekhawat in Bengaluru and Davide Barbuscia in New York; Editing by Shounak Dasgupta and Mark Porter)
