Blackrock (BLK) Struggles; Northern Trust (NTRS) Impresses

• Investment manager BlackRock Inc. on Wednesday reported an 84 percent drop in fourth-quarter profit, as revenue fell sharply and asset values plunged amid the global market meltdown. Net income for the three months ended Dec. 31 slid to $53 million, or 40 cents per share, from $322.4 million, or $2.43 per share, a year ago. Adjusted profit totaled $91 million, or 68 cents per share, in the latest period. Fourth-quarter revenue fell 26 percent to $1.06 billion from $1.44 billion, as investment advisory and administration fees also tumbled 26 percent and performance fees plunged to $24 million from $153 million a year earlier.

• Analysts surveyed by Thomson Reuters expected much higher profit of 99 cents per share and revenue of $1.13 billion.

• Assets under management did end 2008 at $1.31 trillion, up $48.6 billion during the fourth quarter. The increase was driven by $129.1 billion of net new business, partially offset by an $80.5 billion drop in asset values due to market turmoil and the stronger dollar.

• "Without question, 2008 has been the most difficult market environment in memory, with many markets frozen and assets suffering extreme price declines," said Laurence D. Fink, chairman and chief executive, in a statement. "Problems accelerated in the second half of the year and 2009 is beginning on difficult footing with greater headline risk of growing unemployment, weak earnings and increased bankruptcies."

• As global equity markets plummeted, BlackRock, like other asset managers, saw investors pull much-needed cash from funds. BlackRocks net withdrawals totaled $2.3 billion, as new business inflows from global institutional investors and U.S. retail investors were more than offset by $4.1 billion pulled out by international retail investors and $3 billion pulled out of high net worth products.

• "It's sort of indicative of what we are going to be expecting for the sector. The results are going to be noisy and bad," said Roger Smith, an analyst at Fox-Pitt Kelton.

Meanwhile Northern Trust (NTRS) let out a sigh of relief based on what happened to peer State Street (STT) yesterday [State Street Crumbles]... these are actually some very impressive numbers.

• Northern Trust on Wednesday said its fourth-quarter net income rose to $342.3 million, or $1.47 a share, from $125 million, or 55 cents a share, in the same period the previous year. The financial-services firm said total revenue rose 18% to $1.15 billion. Analysts surveyed by Thomson Reuters had been looking for revenue of $968.2 million.
• "Despite the extremely difficult economic conditions, our sound balance sheet and prudent business model enabled us to achieve record fourth quarter performance, and our 2008 full year results were strong in the context of the environment," said Chief Executive Frederick Waddell.
• Shares of Northern Trust rose more than 10% in premarket trading Wednesdsay

No positions