BlackRock, the largest asset manager in the world, reported better-than-expected third-quarter results on Wednesday. Total assets under management rose 17 percent to nearly $6 trillion as net inflows easily beat Wall Street expectations.
Here’s how the company’s results compare to Wall Street’s expectations:
- EPS: $5.92 per share vs $5.56 expected, according to Thomson Reuters
- Revenue: $3.233 billion vs $3.096 billion expected, according to Thomson Reuters
- Total assets under management: $5.977 trillion vs $5.94 trillion expected, according to StreetAccount
- Net inflows: $96 billion vs $71.62 billion expected, according to StreetAccount
“We’re seeing clients looking to put more money to work,” BlackRock CEO Larry Fink told CNBC’s “Squawk Box” shortly after the company’s results were released. “What’s going on is we’re seeing a change in market sentiment. We’re seeing continuing growth in China, above-trendline growth in Japan.”
Shares of BlackRock traded slightly higher in the premarket.
BlackRock also said in its report that its iShares exchange-traded funds business saw $52.3 billion in long-term net inflows, led by $33.1 billion in equity inflows. Assets under management for iShares totaled $1.640 trillion, accounting for 27 percent of BlackRock’s total assets.
The company also said cash assets rose 6 percent on a year-over-year basis to $425.4 billion.
“One of the greatest problems we still have in the world is how much money is sitting on the sideline,” Fink said. “Even in places like Japan, there’s $5 trillion in cash earning negative return. In Germany 72 percent of savings are in bank accounts. We’re seeing some of that unlocked, we’re seeing people put some of that money to work.”
The company’s stock has been on fire this year, advancing 21.5 percent. By comparison, the overall S&P 500 is up about 14 percent in the time period. BlackRock shares have also outperformed the financials sector, which is up 13 percent in 2017.
Earlier this year, the company announced it would use more computers to pick stocks as part of its efforts to overhaul its active management business.
BlackRock said in its third-quarter report that assets under management for its scientific active equity group had risen 86 percent from the year-earlier period.
“So things have been coming along well. Big data, machine learning is certainly a huge driver for our alpha generation,” Jeff Shen, co-CIO of BlackRock’s scientific active equity group, told CNBC last week.