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Blackstone (BX) Stock Slips as Q3 Earnings Miss Estimates
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Blackstone’s (BX - Free Report) third-quarter 2023 distributable earnings of 94 cents per share lagged the Zacks Consensus Estimate of 99 cents. The figure also reflects a decline of 11% from the prior-year quarter.
Shares of BX lost more than 4% in pre-market trading on lower-than-expected quarterly performance.
Results were adversely impacted by lower segment revenues and a rise in GAAP expenses. On the other hand, an increase in the assets under management (AUM) balance, mainly driven by decent inflows, was the tailwind.
Net income attributable to Blackstone was $552 million compared with $2.3 million in the year-ago quarter. Our estimate for the metric was $448.4 million.
Segment Revenues Decline, GAAP Expenses Rise
Total segment revenues were $2.32 billion, down 10% year over year. The top line missed the Zacks Consensus Estimate of $2.56 billion.
On a GAAP basis, revenues were $2.54 billion, increasing significantly year over year. We projected GAAP revenues of $2.44 billion.
Total expenses (GAAP basis) were $1.37 billion, up 43% year over year. The increase was due to a rise in all cost components.
As of Sep 30, 2023, Blackstone had $8.4 billion in total cash, cash equivalents and corporate treasury investments, and $17.2 billion in cash and net investments. The company has a $4.1-billion undrawn credit revolver.
AUM Rises
Fee-earning AUM grew 4% year over year to $734.5 billion as of Sep 30, 2023. Total AUM amounted to $1.01 trillion as of the same date, up 6%. The rise in total AUM was primarily driven by $25.3 billion inflows in the reported quarter.
We had projected fee-earning AUM and total AUM of $738.5 billion and $1 trillion, respectively.
As of Sep 30, 2023, the undrawn capital available for investment was $200.6 billion.
Our Take
Blackstone is well-poised for top-line growth, supported by a continued rise in AUM. The company is expected to keep gaining from its fund-raising ability. However, high expenses and a challenging operating backdrop are expected to hurt the bottom line in the near term.
Performance & Earnings Release Date of Other Asset Managers
BlackRock, Inc.’s (BLK - Free Report) third-quarter 2023 adjusted earnings of $10.91 per share handily surpassed the Zacks Consensus Estimate of $8.52. Also, the figure reflects an increase of 14.2% from the year-ago quarter.
Results have benefited from a rise in revenues and higher non-operating income. Further, AUM balance witnessed improvement. However, higher expenses acted as a headwind for BLK.
Invesco (IVZ - Free Report) is slated to announce third-quarter 2023 numbers on Oct 24.
Over the past week, the Zacks Consensus Estimate for Invesco’s quarterly earnings has moved 2.7% lower to 36 cents, implying a 5.9% rise from the prior-year quarter.
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Blackstone (BX) Stock Slips as Q3 Earnings Miss Estimates
Blackstone’s (BX - Free Report) third-quarter 2023 distributable earnings of 94 cents per share lagged the Zacks Consensus Estimate of 99 cents. The figure also reflects a decline of 11% from the prior-year quarter.
Shares of BX lost more than 4% in pre-market trading on lower-than-expected quarterly performance.
Results were adversely impacted by lower segment revenues and a rise in GAAP expenses. On the other hand, an increase in the assets under management (AUM) balance, mainly driven by decent inflows, was the tailwind.
Net income attributable to Blackstone was $552 million compared with $2.3 million in the year-ago quarter. Our estimate for the metric was $448.4 million.
Segment Revenues Decline, GAAP Expenses Rise
Total segment revenues were $2.32 billion, down 10% year over year. The top line missed the Zacks Consensus Estimate of $2.56 billion.
On a GAAP basis, revenues were $2.54 billion, increasing significantly year over year. We projected GAAP revenues of $2.44 billion.
Total expenses (GAAP basis) were $1.37 billion, up 43% year over year. The increase was due to a rise in all cost components.
As of Sep 30, 2023, Blackstone had $8.4 billion in total cash, cash equivalents and corporate treasury investments, and $17.2 billion in cash and net investments. The company has a $4.1-billion undrawn credit revolver.
AUM Rises
Fee-earning AUM grew 4% year over year to $734.5 billion as of Sep 30, 2023. Total AUM amounted to $1.01 trillion as of the same date, up 6%. The rise in total AUM was primarily driven by $25.3 billion inflows in the reported quarter.
We had projected fee-earning AUM and total AUM of $738.5 billion and $1 trillion, respectively.
As of Sep 30, 2023, the undrawn capital available for investment was $200.6 billion.
Our Take
Blackstone is well-poised for top-line growth, supported by a continued rise in AUM. The company is expected to keep gaining from its fund-raising ability. However, high expenses and a challenging operating backdrop are expected to hurt the bottom line in the near term.
Blackstone Inc. Price, Consensus and EPS Surprise
Blackstone Inc. price-consensus-eps-surprise-chart | Blackstone Inc. 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 & Earnings Release Date of Other Asset Managers
BlackRock, Inc.’s (BLK - Free Report) third-quarter 2023 adjusted earnings of $10.91 per share handily surpassed the Zacks Consensus Estimate of $8.52. Also, the figure reflects an increase of 14.2% from the year-ago quarter.
Results have benefited from a rise in revenues and higher non-operating income. Further, AUM balance witnessed improvement. However, higher expenses acted as a headwind for BLK.
Invesco (IVZ - Free Report) is slated to announce third-quarter 2023 numbers on Oct 24.
Over the past week, the Zacks Consensus Estimate for Invesco’s quarterly earnings has moved 2.7% lower to 36 cents, implying a 5.9% rise from the prior-year quarter.