(Adds details on results, CEO quote)
By Trevor Hunnicutt
Oct 16 (Reuters) - BlackRock Inc reported a better-than-expected quarterly profit on Tuesday, helped by lower taxes, but the company's sales growth sank as investors cut risk in their portfolios.
The company's revenue and earnings before interest and taxes nonetheless fell short of Wall Street's estimates as BlackRock reported its lowest sales of equity, bond and other long-term investments since the second quarter of 2016.
Investors pulled money from the asset manager's institutional stock index funds, while putting more into ostensibly lower risk bond funds and continued to flock to its booming iShares exchange-traded funds (ETFs) business as a low-cost way to access the market.
Revenue of $3.6 billion was nearly 2 percent short of analyst forecasts and earnings before interest and taxes of $1.4 billion fell about 5 percent short.
"It was a tough quarter for the whole industry," BlackRock Chief Executive Officer Larry Fink told CNBC. "I was disappointed in our net flows."
Shares of BlackRock, the world's largest asset manager, were down 1.6 percent in premarket trading.
The results reflected increased investor preference for low-cost ETFs that own broad swathes of the market and make it easier to move in and out of the market. The company makes most of its money by charging a percentage of the value of the assets it manages.
Yet uncertainty in global markets due to an escalating U.S.-China trade dispute and a rout in the Turkish lira kept market volatility elevated through most of the third quarter.
BlackRock's total long-term net flows were down $3.1 billion, the lowest since the second quarter of 2016.
The company's iShares ETFs took in $33.67 billion in new money, down from $52.31 billion, a year earlier, while investors pulled $24.76 billion from its lower-fee institutional accounts, which BlackRock attributed to investors cutting risk.
Net income attributable to the company rose to $1.22 billion in the third quarter ended Sept. 30 from $944 million a year earlier.
On a per share basis, BlackRock earned $7.54, compared with $5.76 a year earlier.
Excluding items, the company earned $7.52 per share, while analysts had expected $6.84, according to I/B/E/S data from Refinitiv. (Reporting by Trevor Hunnicutt; Additional reporting by Diptendu Lahiri in Bengaluru; Editing by Arun Koyyur, Anil D'Silva and Paul Simao)