BGI deal lifts BlackRock's 4Q

The latest earnings numbers from the world's largest asset manager are broadly in line with our estimates

Greggory Warren, CFA 28 January, 2010 | 11:34AM

BlackRock's fourth-quarter results gave some indication of the impact that last year's acquisition of Barclays Global Investors (BGI) will have on both its top and bottom line as we move through 2010. The combined firms finished the year with a little more than $3.3 trillion in assets under management (AUM), which is about where we had pegged them to finish the year.

Given the impact that the BGI acquisition, which added more than $1.8 trillion in assets to the firm's AUM during the final month of 2009, had on revenue and profitability for both the fourth quarter and the full year, it is somewhat arduous to make any meaningful comparisons with past results. That said, on a reported basis, fourth-quarter revenue increased 45% when compared to the prior year's quarter and 35% over the top-line results for the third quarter of 2009.

Excluding the impact of the BGI acquisition, revenue increased 19% year-over-year and 11% sequentially--a much better reflection of the ongoing strength of BlackRock's core business. For the full year, revenue was down 7% to $4.7 billion, which is just about where we had been pegging 2009 results for the combined firms.

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About Author

Greggory Warren, CFA  Greggory Warren, CFA, is a senior stock analyst with Morningstar.

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