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2022-04-13 18:10

BlackRock Inc. stock closed roughly flat even after the company reported its fiscal first-quarter 2022 financial results.

BlackRock's mission is to help a growing number of individuals achieve financial security. They assist millions of individuals create savings that will serve them throughout their lifetimes by making investing easier and more inexpensive as a fiduciary to investors and a major supplier of financial technology.

Investors poured money into BlackRock's different index-traded and active funds, resulting in a better-than-expected quarterly profit for the world's largest asset manager. On Wednesday, BlackRock officials told analysts that the firm's diversified business model could help it, withstand a difficult year for asset managers, however they warned against potential fee pressures.

Financial Outcomes
For the first quarter 2022 the adjusted profit surged to $1.46 billion or $9.52 per share compared to $1.2 billion or $8.04 per share in the first quarter of previous year. According to Refinitiv IBES data, analysts predicted a profit of $8.75 per share on average. The asset manager garnered $86 billion in total net flows in the first quarter, it is a decline from $172 billion a year ago, owing principally to $27 billion in seasonal cash management outflows.

The New York-based bank had $9.57 trillion in assets under management at the end of the first quarter, rise from $9.01 trillion a year earlier. Higher investment advice and administration fees boosted total revenue by nearly 7% to $4.69 billion. In comparison, $4.73 billion was predicted.

CFO Shedlin’s comments
Commenting on the earnings report, Chief Financial Officer Gary Shedlin said:

"The successful multi-year investments have enabled us to deepen our solutions-oriented relationships with clients and have strengthened and diversified our organic revenue growth profile."

According to Shedlin, BlackRock expected that recent market volatility will result in decreased fees from liquid alternatives and long-only products for the rest of the year. BlackRock stock that trades at a PE multiple of 18.73 is down more than 20% for the year. As per Cathy Seifert, an analyst at CFRA:

"The risk for this year is that visibility is low, and there's a lot of uncertainty and that's a negative for the stock.”

Traditional asset managers have been struggling to adjust to a quickly shifting macroeconomic environment marked by high inflation, rising interest rates, and fears of a possible recession since the beginning of the year, which has been exacerbated by Russia's "special military operation" in Ukraine. BlackRock has a market cap of roughly $109 billion at present.