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Blackstone (BX) Beats on Q1 Earnings as Revenues Improve


The Blackstone Group L.P. BX reported first-quarter 2017 economic net income (ENI) of 82 cents per share, which surpassed the Zacks Consensus Estimate of 69 cents. Moreover, the figure compared favorably with 31 cents recorded in the prior-year quarter.

Blackstone’s shares rose nearly 3.6% in pre-market trading, reflecting impressive revenue growth. Notably, the price reaction during the full trading session will provide a better idea about how investors accepted the results.

Better-than-expected results were attributable to a significant increase in revenues. Also, growth in assets under management (AUM) continued to impress. However, escalated expenses acted as a major headwind.

For the quarter, Blackstone reported ENI of $986 million, up significantly year over year.

Revenues Rise, Costs Jump

Total revenue (GAAP basis) increased significantly year over year to $1.94 billion backed by a significant rise in performance fees as well as interest and dividend revenues. Also, the top line handily surpassed the Zacks Consensus Estimate of $1.59 billion.

Total expenses (GAAP basis) flared up 50% year over year to $929.7 million. The increase was primarily due to a rise in total compensation and benefits, and a drastic increase in fund expenses.

Fee-earning AUM grew 15% year over year to $280.2 billion. Total AUM amounted to $368.2 billion as of Mar 31, 2017, up 7% year over year. The rise in total AUM was largely driven by $66.5 billion of gross inflows.

As of Mar 31, 2017, Blackstone had $5 billion in total cash, cash equivalents and corporate treasury investments.

Our Viewpoint

Blackstone remains well positioned to capitalize on the changing investment landscape by making long-term investments and augmenting its fund-raising ability. However, increased dependence on management and advisory fees can affect the company’s financials in the near term.

The Blackstone Group L.P. Price, Consensus and EPS Surprise

The Blackstone Group L.P. Price, Consensus and EPS Surprise | The Blackstone Group L.P. Quote

Currently, Blackstone carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Performance of Other Investment Managers

BlackRock, Inc. BLK reported first-quarter 2017 adjusted earnings of $5.25 per share, which handily surpassed the Zacks Consensus Estimate of $4.94. The better-than-expected number was primarily driven by a rise in revenues, partially offset by higher expenses.

Among other investment managers, Ameriprise Financial, Inc. AMP is slated to report results on Apr 24 and Waddell & Reed Financial, Inc. WDR is slated to come up with its financial numbers on May 2.

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