BlackRock (BLK 463.57, -1.92) is lower by 0.4% despite beating third quarter expectations. While the stock trades lower today, it is still up more than 35.0% for the year, having marked a fresh record immediately after today's opening bell.
The asset manager reported above-consensus third quarter earnings of $5.92 per share on a 14.0% year-over-year increase in revenue to $3.23 billion, which was also ahead of expectations.
The overall increase in revenue was largely fueled by growth in base fees and performance fees. Total base fees grew 9.7% year-over-year to $2.79 billion while total performance fees jumped 229.3% to $191 million. Technology and risk management revenue grew 15.1% to $175 million.
Continued prevalence of passive investing strategies remained a supportive factor, as net inflows totaled $96 billion during the third quarter while assets under management increased 17.0% year-over-year to $5.976 trillion. Net inflows into iShares totaled $52 million.
Operating margin improved by 50 basis points to 43.1% and the effective tax rate was 32.0%, up from 27.6% one year ago. Employee compensation and benefits increased by $119 million year-over-year to $1.09 billion.
Employee compensation and benefits made up 59.16% of total operating expenses, down from 59.52% one year ago.