BlackRock earnings steady despite pessimism BlackRock reported first-quarter results that were barely changed from a year ago as the world's largest money manager by assets under management described a climate where clients are starting to take more risks but remain fundamentally pessimistic. "We are not seeing major changes in investor behaviour," said Laurence Fink, chairman and chief executive, who added that new year confidence was fragile. Attitudes are still on the borderline of pessimism. The asset manager reported a drop in revenues of 1.4 per cent from the year before to $2.25bn, as lower fees from actively managed equity products and cash management offset gains in most long-term asset classes. Net income of $572m was 0.7 per cent higher than the year before, but the effect of stock buybacks through the year meant that earnings per share of $3.14 were up 9 per cent, slightly ahead of analyst expectations. The company paid out 70 per cent of earnings in the quarter on dividends and stock buybacks, and Mr Fink ruled out using BlackRock's $3bn of annual free cash flow in large scale acquisitions. "Despite how many large asset management companies are for sale, we are not interested," he said. Assets under management were up 1 per cent on the year before, to $3.68tn. "While adjusted long-term flows improved [in particular for high-fee products], investors might focus on areas of weakness, such as continued outflows in active equity and a rapidly declining new business pipeline," said Alex Kramm, analyst for UBS, in a note to clients. He calculates that the pipeline has dropped to $24bn, from $54bn three months ago. The company pointed to its retirement and alternatives businesses, which have higher margins, as future sources of growth. In the quarter BlackRock generated $221m of fees in its alternatives business, more than its institutional index business which has more than 13 times the assets under management. BlackRock launched a global branding campaign during the quarter, what it calls its "Investing for a New World" initiative. "We need to have some demand pull, rather than sell push," Mr Fink said. BlackRock shares opened down 3 per cent in early trading, at $195.66 each.