On Wednesday, October 17, 2012, BlackRock (NYSE:BLK) will release its third quarter earnings. In the past month, expectations have risen for the upcoming results. The consensus analyst estimate has risen from $3.22 per share to the current projection of earnings of $3.28 per share.
Earnings are perhaps the single most studied number in a company's financial statements because they show a company's profitability. SEE: Everything Investors Need To Know About Earnings
What to Expect: BlackRock is expected to report $3.28 per share, up 15.9% from a year ago when the company reported earnings of $2.83 per share.
The consensus estimate has moved down from $3.29 in the last 90 days. Analysts are expecting earnings of $13.16 per share for the fiscal year.
BlackRock is expected to beat last year's reported revenue of $2.15 billion and come in at $2.26 billion for the quarter. Revenue for the fiscal year is expected to come in at $9.2 billion.
Company Performance: BlackRock has reported declining revenue for the past four quarters. It decreased 5.4% to $2.23 billion in the second quarter. Prior to that, the figure fell 0.6% in the first quarter, 10.4% in the fourth quarter of the last fiscal year and 2.1% in the third quarter of the last fiscal year.
While the company has been profitable for the last eight quarters, income has fallen year-over-year by an average of 4.3% over the past four quarters.
Relative to the industry P/E ratio of 21.16, BLK's 15.0 is low. A low P/E ratio may indicate that the market expects relatively slower earnings growth. One of the most important estimates of stock market valuation is the price/earnings ratio (P/E ratio). From the investor's perspective, a stock with a lower ratio is relatively cheaper than a stock with a higher ratio. SEE: How To Find P/E And PEG Ratios
The stock price has risen from $175.29 on July 16, 2012 to $185.79 over the past quarter. BlackRock's best recent streak was when its price gained $5.82 per share between October 3, 2012 and October 5, 2012.
The Competition: BlackRock, along with its subsidiaries, provides investment management services to institutional clients and to individual investors through various investment vehicles. Most analysts (10 of 17) rate BlackRock a buy.
The company's closest competitor in the investment services industry is UBS AG (UBS). Analysts are more optimistic about BlackRock than about UBS AG. Only two out of three analysts rate the latter a buy.