Big Beat for BlackRock

Shares rise 8% after the asset manager posts a sharp rise in earnings.

Author:: Gregg Greenberg
Publish date:: Jan 19, 2006 11:55 AM EST

Shares of asset manager

BlackRock

had a big day Thursday after the company reported better-than-expected fourth-quarter earnings, as higher assets under management led to a jump in fee revenue.

New York-based BlackRock, which specializes in running money for institutions, said its net earnings rose to $72.9 million, or $1.09 a share, from $49.8 million, or 75 cents a share, a year earlier. Adjusted earnings, which exclude costs related to a long-term retention and incentive plan, were $1.21 a share, beating Thomson First Call's mean analyst estimate for an adjusted profit of $1.06 cents a share.

BlackRock's assets under management rose to $452.7 billion at Dec 31 from $341.8 billion at the same time a year earlier. Revenues surged 96% to $369.1 million from $188.7 million. Net new business totaled $23.7 billion during the quarter, including $14.3 billion in long-dated products and $9.4 billion in cash management portfolios. For the full year, BlackRock recorded $50.2 billion of net new business.

"I believe we are well-positioned to sustain new business momentum in 2006," said Laurence Fink, chairman and chief executive, in a statement. "I am optimistic about our ability to earn strong performance fees in 2006 given our diversified product mix and market views."

BlackRock is majority owned by

PNC Financial Services Group

(PNC) - Get Report

, which reported a 16% rise in earnings Thursday.

BlackRock's shares were recently trading up $9.47, or 8.5%, to $119.77. Shares of PNC were up $1.67, or 2.7%, to $64.26.

Blackrock's strong performance comes on the heels of yesterday's impressive earnings announcement from fellow money manager

State Street Corp

(STT) - Get Report

. Boston-based State Street said Wednesday that earnings grew 35% in the fourth quarter, also lifted by higher fee revenue.

State Street said quarterly income climbed to $249 million, or 74 cents a share, from $184 million, or 55 cents, last year. The results beat analysts' average forecast by a penny.

BlackRock's success is also spurring shares of

Nuveen

(JNC)

, an asset manager primarily recognized for its municipal bond funds. The Chicago-based company reported flat results yesterday despite an 18% jump in assets under management.

Nuveen said net income for the quarter ended Dec. 31 held steady at $43.5 million, or 53 cents a share, compared with $43.5 million, or 45 cents a share, a year earlier. Fiscal 2005 earnings per share reflects a $600 million share repurchase in April.

Nuveen's profit was in line with the First Call mean estimate.

Shares of State Street recently traded up 84 cents, or 1.3%, $58.75. Nuveen shares traded up 69 cents, or 1.6%, to $44.89.