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BlackRock second quarter income at USD1.59 per share

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BlackRock has reported second quarter 2009 net income of USD218m, or USD1.59 per diluted common share.

BlackRock has reported second quarter 2009 net income of USD218m, or USD1.59 per diluted common share.

Operating income for second quarter was USD261m and non-operating income, net of non-controlling interests, was USD51m. The reported operating margin was 25.4 per cent.

Net income, as adjusted, was USD1.75 per diluted common share or USD239m, including operating income of USD1.44 per diluted share, non-operating income of USD0.20 per diluted share and an USD0.11 per diluted share benefit primarily from a favourable tax ruling received during the quarter.

Net income, as adjusted, was 117 per cent higher than first quarter 2009 and 16 per cent lower than second quarter 2008.

BlackRock says its results reflect improving momentum in the business. Equity and fixed income markets have improved during the second quarter, more than offsetting first quarter market declines and contributing to positive momentum for net new business.

Revenues were USD1,029m, up four per cent compared to the first quarter 2009 and down 26 per cent compared to second quarter 2008. Operating income, as adjusted, was USD302m, which included an USD18m expense due to balance sheet related foreign currency effects. Excluding these effects, changes in operating income were in line with changes in revenue.

Operating margin, as adjusted, of 34.4 per cent reflected cost discipline offset by balance sheet related foreign currency effects and an increase in incentive compensation associated with stronger net income.

Net non-operating income, as adjusted, of USD42m reflected the positive effects of markets on the company’s co-investments and seed investments, a significant improvement compared to prior periods.

AUM was USD1.373trn at 30 June 2009, up seven per cent since 31 March 2009.

Net new business totalled USD15.2bn during the quarter, including USD28.5bn of net inflows in long-dated assets, USD7.5bn of net outflows in cash management products, and USD5.8bn of net distributions in advisory assets.

"Our second quarter results reflected the strength of our global focus on investment performance, client service and cost management," says Laurence D. Fink, chairman and chief executive of BlackRock (pictured). "We worked closely with clients and distribution partners to serve renewed investor appetite for higher return assets, a key driver underlying net new business results for the quarter. We also continued to benefit from growing momentum in investment and fiduciary outsourcing, as clients look to firms that can provide comprehensive investment solutions. Similarly, we continued to capitalize on demand for risk management tools and advice through our BlackRock Solutions offerings.

"While markets were significantly more favourable during the second quarter, they remain choppy in the face of conflicting signals about global economic conditions. These are difficult conditions for portfolio managers to navigate, and I am proud of the job our teams are doing. Investment performance continued to improve in fixed income, where refinements to the investment process, a successful integration of the R3 team and selective new hires have helped drive strong results year-to-date. Performance remained competitive in equities and improved sharply in a number of alternative products, including our fund of hedge funds.’

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