BlackRock Q1 Profit Steady On Surge in ETF Transactions

(Reuters) – BlackRock Inc (NYS:BLK – News), the world’s largest asset manager, said first-quarter profits were steady, bolstered by strong inflows into its popular iShares exchange-traded fund business.

But despite the inflows and booming equity markets during the first quarter, revenue at New York-based BlackRock declined $33 million, or 1 percent, to $2.2 billion, the firm said on Wednesday. Investors continued to favor the firm’s indexed funds over actively managed accounts, which typically generate higher fees, though not necessarily higher profit margins.

Shares of BlackRock, fell 2.4 percent to $196.88 on Wednesday on the New York Stock Exchange. Through Tuesday, the shares had gained 12 percent this year, compared with a 10 percent gain in the S&P 500 index (.SPX).

Chief executive Laurence Fink kept a tight hand on expenses. Even as BlackRock rolled out a new global ad campaign around the slogan “Investing for a New World,” Fink cut operating expenses by $50 million, or 3 percent, to $1.4 billion on lower office occupancy, fund and compensation costs.

Net income increased to $572 million, or $3.14 per share, from $568 million, or $2.89 per share, in the same quarter a year before.