BlackRock Earnings Beat Estimate

by Carla Johnson, Investors Offshore.com, London

18 January 2008

Asset management firm, BlackRock on Thursday reported net income for the fourth quarter and year ended December 31, 2007 of USD322 million and USD995 million, respectively.

Diluted earnings per share for the fourth quarter and year ended December 31, 2007 were USD2.43 and USD7.53, compared to USD1.28 and USD3.87 in comparable periods of 2006.

Reported operating margin for the fourth quarter and full year of 2007 was 32.4% and 26.7%, respectively, compared to 24.2% and 22.5% in comparable periods of 2006.

Fourth quarter 2007 results reflect the impact of the acquisition of the fund of funds business of Quellos Group, LLC, as well as the first presentation of year over year comparative results, including the operations of Merrill Lynch Investment Managers, which was acquired on September 29, 2006.

Diluted earnings per share for the fourth quarter and full year 2006 included integration charges associated with the MLIM merger of USD0.25 and USD1.07 per share, respectively.

Diluted earnings per share for the fourth quarter 2007 and full year 2007 included MLIM integration charges of less than USD0.01 and USD0.10 per share, respectively.

“The markets were exceptionally volatile during the fourth quarter as investors digested the implications of the U.S. housing slump, the ongoing sub-prime debacle, a sustained liquidity contraction and a weaker dollar,” observed Laurence D. Fink, Chairman and Chief Executive Officer of BlackRock, adding that:

“International institutions have continued to invest substantial sums in US Treasuries and more recently in capital instruments issued by various financial institutions.

"Yet, low interest rates and a weaker dollar suggest increased allocations outside the U.S. over time, as well as faster adoption of new strategies, including liability driven investing, the increased use of multiple asset class products and the mainstreaming of alternatives. This outlook reinforces our strategic focus on investment performance, globalization and product diversification, client service and independent advice.

“I am incredibly proud of how the firm has navigated the market turmoil," he continued, going on to add that:

"We had adopted a conservative credit bias earlier in the cycle and remained rigorous in our risk management discipline. Although we were not completely unscathed by the market, we were well positioned and have benefited in a number of ways. We attracted over USD75 billion of net inflows in our cash management products in 2007 and we will continue to devote our time and capital to developing innovative and opportunistic strategies for our clients."

"Finally, we have had unprecedented demand for our BlackRock Solutions advisory services and we will continue to invest in expansion of these capabilities," Mr. Fink stated.

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