A number of banks and financial companies are set to announce their second-quarter results in the week ahead and analysts are awaiting information on BlackRock earnings.
BlackRock is scheduled to report on July 17, with T. Rowe Price, WisdomTree Investments and Invesco among asset managers reporting in the following weeks.
Most analysts anticipate numbers from BlackRock earnings and other asset managers to point to a sharp stock market rebound. The S&P 500 SPX rose 20% in the second quarter after falling as much in the first three months of 2020 after the coronavirus pandemic slammed the economy.
The performance of asset managers is usually indicative of the broader state of the capital markets, which is why investors are looking to BlackRock earnings report next week. Although there is a range of scenarios in the possible economic recovery ahead, including further acceleration of U.S. coronavirus cases and potential market volatility around the Nov. 3 presidential election.
Still, “just on a market level, the asset managers are inmuch better shape coming out of the second quarter than theywere coming out of the first quarter,” said Macrae Sykes, global financial services sector analyst at Gabelli Funds.
Expectations are high for a strong recovery in the sector’s assets under management (AUM) in the second quarter, driven in part by rising financial markets and improving risk appetite. Higher levels of AUM mean more fees and stronger margins and earnings, analysts said.
BlackRock’s assets shrunk to $6.47 trillion at the end of the first-quarter, from $7.43 trillion at the end of 2019. In the week ahead, BlackRock earnings are expected to be in the region of $1.1 billion, or $6.97 a share, on sales of $3.6 billion before the market opens on Friday, based on a FactSet survey of 14 analysts.
In the same period a year ago, BlackRock earnings posted an increase of $6.41 a share on sales of $3.5 billion. It reported net income of $1.1 billion.
The stock has risen 19.7% since the company last reported earnings on April 16.
In the upcoming quarter analysts are forecasting net income of $1.1 billion, or $7.25 a share, on sales of $3.7 billion.
For the year, analysts project revenue of $14.9 billion.