Blackstone (BX) Beats On Q1 Earnings As Revenues Improve
Zacks Investment Research | Apr 19, 2017 10:14PM ET
The Blackstone Group L.P. (NYSE:BX) reported first-quarter 2017 economic net income (ENI (MI: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
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