UPDATE 3-BlackRock profit disappoints, shares fall

(Recasts with analyst & CEO comments, stock price, byline)

By Muralikumar Anantharaman

BOSTON, April 16 (Reuters) - U.S. money manager BlackRock Inc (BLK.N: Quote, Profile, Research) reported a higher first-quarter profit on Wednesday as assets under management grew, but earnings fell short of Wall Street estimates, hurt by market turmoil.

The largest publicly traded U.S. asset management company, however, was cautiously optimistic about its prospects for the rest of 2008, citing its diversified business and a record pipeline of new business.

Shares of BlackRock, which has benefited from the credit crisis by winning new mandates to restructure stricken portfolios while itself steering clear of most risky investments, fell after the results even as other money managers enjoyed sharp gains in a strong overall market.

But analysts saw signs of strength for BlackRock in the year ahead and some forecast trouble for other money managers when they report earnings next week.

"BlackRock's numbers are almost a high watermark for the less diversified firms and the firms that have had more troubles. Their results most likely are only going to be worse," said Andrew Richards, an analyst at research firm Morningstar.

First-quarter profit was down from the 2007 fourth quarter, but BlackRock said its new business pipeline stood at a record $105.8 billion as of April 14.

Net income was $242 million, or $1.82 per share, up from $195.4 million, or $1.48 per share, in the year-ago first quarter. Excluding costs related to compensation expenses, the company earned $1.90 a share.