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Blackstone (BX) Stock Down Despite Q3 Earnings Beat, Costs Up
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Blackstone’s (BX - Free Report) third-quarter 2020 distributable earnings of 63 cents per share surpassed the Zacks Consensus Estimate of 57 cents. Moreover, the figure represents a rise of 8.6% from the prior-year quarter.
Results primarily benefited from an improvement in revenues. Moreover, a rise in assets under management (AUM) balance, mainly driven by inflows, was a positive for the company. However, higher operating expenses were the undermining factor. Probably, because of this, shares of the company lost 3.1% following the earnings release.
Net income attributable to Blackstone was $794.7 million, up 2% year over year.
Segment Revenues Improve, Expenses Rise
Total segment revenues were $1.46 billion, up 6.3% year over year. The reported figure was in line with the Zacks Consensus Estimate. On a GAAP basis, revenues of $3.03 billion were up 74.8% from the prior-year quarter.
Total expenses (GAAP basis) increased 64.9% year over year to $1.33 billion. The rise in total compensation and benefits costs were partly offset by lower general, administrative and other costs, interest expenses, and fund expenses.
As of Sep 30, 2020, Blackstone had $5.6 billion in total cash, cash equivalents and corporate treasury investments as well as $11.1 billion in cash and net investments. Further, the company has a $1.6-billion undrawn credit revolver.
AUM Improves
Fee-earning AUM grew 12.8% year over year to $444.51 billion as of Sep 30, 2020. Total AUM amounted to $584.38 billion as of Sep 30, 2020, up 5.5% year over year. The rise in total AUM was largely driven by $15.1 billion of inflows.
As of Sep 30, 2020, undrawn capital available for investment was $152.4 billion.
Share Repurchase Update
The company repurchased 2 million shares in the quarter.
Our Viewpoint
Growth in AUM, driven by inflows, is expected to continue aiding Blackstone’s top line in the near term amid the coronavirus-induced crisis. Also, the company is well-positioned to gain from its fund-raising ability. However, continuously increasing expenses are expected to hamper the bottom line to an extent in the near term.
Blackstone Group IncThe Price, Consensus and EPS Surprise
BlackRock, Inc.’s (BLK - Free Report) third-quarter 2020 adjusted earnings of $9.22 per share hugely surpassed the Zacks Consensus Estimate of $7.81. The figure reflects a rise of 29% from the year-ago quarter’s number.
Invesco (IVZ - Free Report) reported third-quarter 2020 adjusted earnings of 53 cents per share, beating the Zacks Consensus Estimate of 48 cents. However, the bottom line declined 24.3% from the prior-year quarter.
Affiliated Managers Group, Inc.’s (AMG - Free Report) third-quarter 2020 economic earnings of $3.27 per share surpassed the Zacks Consensus Estimate of $2.86. Also, the bottom line grew 3.5% year over year.
Looking for Stocks with Skyrocketing Upside?
Zacks has just released a Special Report on the booming investment opportunities of legal marijuana.
Ignited by referendums and legislation, this industry is expected to blast from an already robust $17.7 billion in 2019 to a staggering $73.6 billion by 2027. Early investors stand to make a killing, but you have to be ready to act and know just where to look.
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Blackstone (BX) Stock Down Despite Q3 Earnings Beat, Costs Up
Blackstone’s (BX - Free Report) third-quarter 2020 distributable earnings of 63 cents per share surpassed the Zacks Consensus Estimate of 57 cents. Moreover, the figure represents a rise of 8.6% from the prior-year quarter.
Results primarily benefited from an improvement in revenues. Moreover, a rise in assets under management (AUM) balance, mainly driven by inflows, was a positive for the company. However, higher operating expenses were the undermining factor. Probably, because of this, shares of the company lost 3.1% following the earnings release.
Net income attributable to Blackstone was $794.7 million, up 2% year over year.
Segment Revenues Improve, Expenses Rise
Total segment revenues were $1.46 billion, up 6.3% year over year. The reported figure was in line with the Zacks Consensus Estimate. On a GAAP basis, revenues of $3.03 billion were up 74.8% from the prior-year quarter.
Total expenses (GAAP basis) increased 64.9% year over year to $1.33 billion. The rise in total compensation and benefits costs were partly offset by lower general, administrative and other costs, interest expenses, and fund expenses.
As of Sep 30, 2020, Blackstone had $5.6 billion in total cash, cash equivalents and corporate treasury investments as well as $11.1 billion in cash and net investments. Further, the company has a $1.6-billion undrawn credit revolver.
AUM Improves
Fee-earning AUM grew 12.8% year over year to $444.51 billion as of Sep 30, 2020. Total AUM amounted to $584.38 billion as of Sep 30, 2020, up 5.5% year over year. The rise in total AUM was largely driven by $15.1 billion of inflows.
As of Sep 30, 2020, undrawn capital available for investment was $152.4 billion.
Share Repurchase Update
The company repurchased 2 million shares in the quarter.
Our Viewpoint
Growth in AUM, driven by inflows, is expected to continue aiding Blackstone’s top line in the near term amid the coronavirus-induced crisis. Also, the company is well-positioned to gain from its fund-raising ability. However, continuously increasing expenses are expected to hamper the bottom line to an extent in the near term.
Blackstone Group IncThe Price, Consensus and EPS Surprise
Blackstone Group IncThe price-consensus-eps-surprise-chart | Blackstone Group IncThe 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.’s (BLK - Free Report) third-quarter 2020 adjusted earnings of $9.22 per share hugely surpassed the Zacks Consensus Estimate of $7.81. The figure reflects a rise of 29% from the year-ago quarter’s number.
Invesco (IVZ - Free Report) reported third-quarter 2020 adjusted earnings of 53 cents per share, beating the Zacks Consensus Estimate of 48 cents. However, the bottom line declined 24.3% from the prior-year quarter.
Affiliated Managers Group, Inc.’s (AMG - Free Report) third-quarter 2020 economic earnings of $3.27 per share surpassed the Zacks Consensus Estimate of $2.86. Also, the bottom line grew 3.5% year over year.
Looking for Stocks with Skyrocketing Upside?
Zacks has just released a Special Report on the booming investment opportunities of legal marijuana.
Ignited by referendums and legislation, this industry is expected to blast from an already robust $17.7 billion in 2019 to a staggering $73.6 billion by 2027. Early investors stand to make a killing, but you have to be ready to act and know just where to look.
See the pot stocks we're targeting >>