The world's largest asset manager BlackRock reported quarterly earnings early Friday. BlackRock stock faded Friday following results.
Earnings
BlackRock kicked its recent earnings slump with its Q2 results Friday.
Earnings bolted 28% to $9.06 per share on a 1% revenue dip to $4.46 billion. Adjusted earnings leapt 26% to $9.28 per share. FactSet analysts expected earnings of $8.47 per share on $4.47 billion in revenue.
Average assets under management rose 2% to $9.19 trillion, shy of estimates of $9.199 trillion and BlackRock's record high of $9.75 trillion from Q4 2021. Assets under management at the end of the quarter jumped 11% to $9.42 trillion.
The results marked a big turnaround for BlackRock. The company averaged a 19.8% drop in earnings the last four quarters leading up to the Q2 report. Revenue averaged an 11.5% decline during the period.
BlackRock Ignites Bitcoin Rally
BlackRock sparked a bitcoin rally in June after filing for a bitcoin exchange-traded fund with the Securities and Exchange Commission on June 15. Following the filing, the world's largest cryptocurrency surged back above $30,000 and has held that level for roughly three weeks.
Fidelity Investments, Invesco, WisdomTree, Cathie Wood's ARK Investment Management, Valkyrie and Bitwise Asset Management all filed or refiled bitcoin ETF applications recent weeks. Elsewhere, Hong Kong-based HSBC Bank launched its bitcoin and ethereum futures ETFs on June 26.
Cryptocurrency Prices and News
BlackRock CEO Larry Fink told Fox Business in a July 5 interview that bitcoin, tokenizing assets and securities, could "revolutionize" finance. "I do believe the role of crypto is digitizing gold in many ways," he said.
However, there are likely roadblocks ahead. The SEC informed the Nasdaq and CBOE Global Markets exchanges that the recent wave of bitcoin ETF applications aren't sufficiently clear or comprehensive, the Wall Street Journal reported July 1 citing people familiar with the matter.
"We work really closely with our regulators and we want to hear from our regulators — what are their issues and can we fix those issues around that," Fink said.
ESG Discussion Heats Up
Meanwhile, environmental, social and governance (ESG) policies and regulations are likely to be a focal point in BlackRock's conference call. Republicans from the House Financial Services Committee plan to hold hearings this month and vote on bills related to ESG investing. BlackRock had leaned hard into ESG focus over the past several years, but has recently cooled that stance as ESG has become a political football.
Conservatives, including Financial Services Committee Chair Patrick McHenry (R-N.C.) say ESG policies are a tool for enforcing a left-leaning agenda. Democrats argue they make investors more aware of impacts, risks and opportunities from business operations.
Last month, Fink said he stopped using the term ESG because it has become "weaponized" and "misused by the far left and the far right."
BlackRock was previously accused of contributing to "woke capitalism" by conservative groups and currently faces boycotts from Texas and Florida. Last August, Texas barred 10 companies and 348 investment funds from doing business in the state for taking steps to "boycott energy companies" from the fossil fuel industry. In December, Florida yanked $2 billion worth of invested state assets out of BlackRock funds with plans to divvy it out to other money managers this year.
BlackRock Stock
BLK shares slid 1.6% Friday. BlackRock stock rose about 8.1% this week leading up to the report. Shares rose 2.7% so far this year.
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