BlackRock said Wednesday its fourth-quarter profit surged nearly fourfold due to its $13.5 billion acquisition of Barclays Global Investors last year.
Assets under management shot up to $3.35 trillion, from $1.31 trillion the year earlier. That included $1.85 of assets acquired in the Barclay's deal.
As BlackRock integrated the Barclays unit, the market went on a tear, bolstering its earnings even more.
Net new business totaled $82 billion, BlackRock said. Reflecting the company's growing global business, net new business from international clients totaled $34 billion, or 41 percent. That was a reversal from the prior year, when spooked investors were pulling money out of investments as the economy melted down.
"The integration of BlackRock and BGI is off to a strong start," said Chairman and CEO Laurence D. Fink. While the combination of the companies is moving forward, however, there may be bumps. "Notwithstanding our early accomplishments, we are under no illusion: integrations are hard and we have a great deal of work ahead."
For the final three months of 2009, net income rose to $256 million, or $1.62 per share, compared with $52 million, or 39 cents per share, in the 2008 fourth quarter.
Excluding the costs associated with $413.5 billion acquisition, and other items, adjusted profit for the 2009 fourth quarter was $379 million, or $2.39 per share.
Revenue shot up 45 percent to $1.54 billion, from $1.06 billion in the prior-year period.
Analysts polled by Thomson Reuters, on average, expected profit of $2.10 per share, on revenue of $1.25 billion.
Shares of BlackRock Inc. still fell $2.81, or 1.2 percent, to $221.90.
The Barclays Global Investors acquisition, which closed Dec. 1, contributed $94 million to fourth quarter profit. That was more than offset by a $108 million after-tax expense associated with the purchase and costs of combining the companies, the company said.
Operating expenses jumped 59 percent to $1.15 billion, from $726 million. The increase was 46 percent excluding acquisition-related costs, BlackRock said. That was mostly due to higher employee compensation and benefits costs, due in part to adding BGI's staff.
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