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Inflows, AUM Growth Likely to Aid Blackstone's (BX) Q2 Earnings
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Blackstone (BX - Free Report) is scheduled to report second-quarter 2023 results on Jul 20, before the opening bell. Its revenues and earnings are likely to have declined in the to-be-reported quarter on a year-over-year basis.
In the last reported quarter, the company’s earnings were in line with the Zacks Consensus Estimate. Results primarily benefited from a rise in the assets under management (AUM) balance, mainly driven by decent inflows. However, a tough operating environment hurt performance fees and management fees, which led to a fall in revenues.
Blackstone has an impressive earnings surprise history. Its earnings surpassed the Zacks Consensus Estimate in three and matched in one of the trailing four quarters, the average surprise being 5.8%.
The business prospects and activities of the company in the second quarter did not win analysts’ confidence. As a result, the Zacks Consensus Estimate for its second-quarter earnings of 92 cents per share has been revised 2.1% lower over the past seven days. The figure indicates a decline of 38.3% from the prior-year quarter’s reported number. Our estimate for earnings is pinned at 89 cents.
The consensus estimate for sales is pegged at $2.37 billion, which suggests a fall of 42.9% from the year-ago quarter’s reported figure. Our estimate for the same is $2.35 billion, implying a decline of 43.5%.
Now, let’s check the factors that are expected to have influenced the company’s second-quarter performance.
Key Factors and Estimates for Q2
Blackstone has been witnessing a rise in fee-earning AUM and total AUM for the past few years on the back of its diversified product and revenue mix, a superior position in the alternative investments space, and net inflows. A similar trend is likely to have continued in the to-be-reported quarter.
In the past few quarters, huge market volatility and client activity drove trading revenues. However, the Congressional debate over the debt ceiling, risks of an economic downturn/recession, the Federal Reserve’s hawkish monetary policy stance to stem out “sticky” inflation and geopolitical concerns led to ambiguity among investors in the second quarter.
These factors resulted in lower volatility in equity markets and other asset classes, including commodities, bonds and foreign exchange. Also, client activity was subdued.
Despite this, Blackstone is likely to have recorded growth in AUM balance, driven by overall asset inflows.
The Zacks Consensus Estimate for Blackstone’s second-quarter AUM is pegged at $1.01 trillion, which indicates a rise of 7.5% from the prior-year quarter’s reported figure. Our estimate for total AUM is $979.7 billion. The consensus estimate for total fee-earning AUM of $749 billion suggests a year-over-year rise of 9.5%. Our estimate for the same is pinned at $737.2 billion.
The Zacks Consensus Estimate for net management and advisory fees (segment revenues) for the to-be-reported quarter is pegged at $1.66 billion, which indicates a rise of 6.6% from the prior-year quarter. Our estimate for the same is $1.40 billion.
The consensus estimate for fee-related performance revenues (segment revenues) of $160 million suggests a decline of 53.9% from the prior-year quarter’s reported figure. Our estimate for the metric is pinned at $121.1 million.
Blackstone’s expenses have been elevated over the past few years mainly because of higher general, administrative and other expenses. As the company has been continuing to make investments in franchise, expenses are expected to have risen to some extent in the second quarter. Our estimate for total expenses (GAAP basis) is $1.41 billion, implying a year-over-year rise of 88.9%.
Here is what our quantitative model predicts:
According to our quantitative model, the chances of Blackstone beating the Zacks Consensus Estimate this time are high. This is because it has the right combination of the two key ingredients — a positive Earnings ESP and Zacks Rank #3 (Hold) or better.
You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Earnings ESP: The Earnings ESP for Blackstone is +0.65%.
Zacks Rank: The company currently carries a Zacks Rank #3.
Other Stocks That Warrant a Look
A couple of other finance stocks, which you may want to consider, as these too have the right combination of elements to post an earnings beat in their upcoming releases per our model, are Invesco (IVZ - Free Report) and Moody's Corporation (MCO - Free Report) .
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Inflows, AUM Growth Likely to Aid Blackstone's (BX) Q2 Earnings
Blackstone (BX - Free Report) is scheduled to report second-quarter 2023 results on Jul 20, before the opening bell. Its revenues and earnings are likely to have declined in the to-be-reported quarter on a year-over-year basis.
In the last reported quarter, the company’s earnings were in line with the Zacks Consensus Estimate. Results primarily benefited from a rise in the assets under management (AUM) balance, mainly driven by decent inflows. However, a tough operating environment hurt performance fees and management fees, which led to a fall in revenues.
Blackstone has an impressive earnings surprise history. Its earnings surpassed the Zacks Consensus Estimate in three and matched in one of the trailing four quarters, the average surprise being 5.8%.
Blackstone Inc. Price and EPS Surprise
Blackstone Inc. price-eps-surprise | Blackstone Inc. Quote
The business prospects and activities of the company in the second quarter did not win analysts’ confidence. As a result, the Zacks Consensus Estimate for its second-quarter earnings of 92 cents per share has been revised 2.1% lower over the past seven days. The figure indicates a decline of 38.3% from the prior-year quarter’s reported number. Our estimate for earnings is pinned at 89 cents.
The consensus estimate for sales is pegged at $2.37 billion, which suggests a fall of 42.9% from the year-ago quarter’s reported figure. Our estimate for the same is $2.35 billion, implying a decline of 43.5%.
Now, let’s check the factors that are expected to have influenced the company’s second-quarter performance.
Key Factors and Estimates for Q2
Blackstone has been witnessing a rise in fee-earning AUM and total AUM for the past few years on the back of its diversified product and revenue mix, a superior position in the alternative investments space, and net inflows. A similar trend is likely to have continued in the to-be-reported quarter.
In the past few quarters, huge market volatility and client activity drove trading revenues. However, the Congressional debate over the debt ceiling, risks of an economic downturn/recession, the Federal Reserve’s hawkish monetary policy stance to stem out “sticky” inflation and geopolitical concerns led to ambiguity among investors in the second quarter.
These factors resulted in lower volatility in equity markets and other asset classes, including commodities, bonds and foreign exchange. Also, client activity was subdued.
Despite this, Blackstone is likely to have recorded growth in AUM balance, driven by overall asset inflows.
The Zacks Consensus Estimate for Blackstone’s second-quarter AUM is pegged at $1.01 trillion, which indicates a rise of 7.5% from the prior-year quarter’s reported figure. Our estimate for total AUM is $979.7 billion. The consensus estimate for total fee-earning AUM of $749 billion suggests a year-over-year rise of 9.5%. Our estimate for the same is pinned at $737.2 billion.
The Zacks Consensus Estimate for net management and advisory fees (segment revenues) for the to-be-reported quarter is pegged at $1.66 billion, which indicates a rise of 6.6% from the prior-year quarter. Our estimate for the same is $1.40 billion.
The consensus estimate for fee-related performance revenues (segment revenues) of $160 million suggests a decline of 53.9% from the prior-year quarter’s reported figure. Our estimate for the metric is pinned at $121.1 million.
Blackstone’s expenses have been elevated over the past few years mainly because of higher general, administrative and other expenses. As the company has been continuing to make investments in franchise, expenses are expected to have risen to some extent in the second quarter. Our estimate for total expenses (GAAP basis) is $1.41 billion, implying a year-over-year rise of 88.9%.
Here is what our quantitative model predicts:
According to our quantitative model, the chances of Blackstone beating the Zacks Consensus Estimate this time are high. This is because it has the right combination of the two key ingredients — a positive Earnings ESP and Zacks Rank #3 (Hold) or better.
You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Earnings ESP: The Earnings ESP for Blackstone is +0.65%.
Zacks Rank: The company currently carries a Zacks Rank #3.
Other Stocks That Warrant a Look
A couple of other finance stocks, which you may want to consider, as these too have the right combination of elements to post an earnings beat in their upcoming releases per our model, are Invesco (IVZ - Free Report) and Moody's Corporation (MCO - Free Report) .
The Earnings ESP for IVZ is +0.84% and it carries a Zacks Rank #3 at present. The company is slated to report second-quarter 2023 results on Jul 25. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
MCO is scheduled to release quarterly results on Jul 25. The company, which carries a Zacks Rank #2 (Buy) at present, has an Earnings ESP of +2.51%.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.