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Blackstone (BX) Beats on Q4 Earnings as Revenues Improve
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The Blackstone Group L.P. (BX - Free Report) reported fourth-quarter 2016 economic net income (ENI) of 68 cents per share, which surpassed the Zacks Consensus Estimate of 63 cents. Moreover, the figure compared favorably with 37 cents recorded in the prior-year quarter.
Better-than-expected quarterly results were attributable to a significant increase in revenues. Also, growth in assets under management (AUM) continued to be impressive. However, escalated expenses acted as a major headwind.
For the quarter, Blackstone reported ENI of $811.6 million, up 86% year over year.
For 2016, the company’s ENI of $2.00 per share was above the Zacks Consensus Estimate of $1.95. Also, the figure grew 10% year over year. ENI of $2.39 billion increased 11% from the 2015 level.
Revenues Rise, Costs Jump
Total revenue (GAAP basis) increased 75% year over year to $1.57 billion. The rise was mainly due to significant rise in performance fees as well as higher fee, and interest and dividend revenues, partially offset by investment loss. Further, it handily surpassed the Zacks Consensus Estimate of $1.43 billion.
For 2016, total revenue (GAAP basis) was $5.13 billion, which outpaced the Zacks Consensus Estimate of $4.91 billion. Also, the figure was 10% above the year-ago level.
Total expenses (GAAP basis) jumped 48% year over year to $824.5 million. The hike was primarily due to a rise in total compensation and benefits, and drastic increase in fund expenses.
Fee-earning AUM grew 13% year over year to $277.1 billion. Total AUM amounted to $366.6 billion as of Dec 31, 2016, up 9% year over year. The rise in total AUM was largely driven by $69.7 billion of gross inflows.
As of Dec 31, 2016, Blackstone had $4.6 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. In addition, current dislocation in the credit markets and increased liquidity pressure are anticipated to create more investment opportunities for the company. However, increased dependence on management and advisory fees can adversely affect the company’s financials in the near term.
The Blackstone Group L.P. Price, Consensus and EPS Surprise
Janus Capital Group, Inc.’s fourth-quarter 2016 adjusted earnings per share of 20 cents lagged the Zacks Consensus Estimate of 24 cents. A fall in revenues and higher expenses were primarily responsible for the lower-than-expected results. However, an increase in average and total AUM (assets under management) was on the positive side.
BlackRock, Inc. (BLK - Free Report) reported fourth-quarter 2016 adjusted earnings of $5.14 per share, which handedly surpassed the Zacks Consensus Estimate of $5.02. The better-than-expected number was primarily driven by a decline in total expenses. Also, higher revenues for the quarter acted as a tailwind.
Among other investment managers, Waddell & Reed Financial, Inc. is slated to release its fourth-quarter 2016 results on Jan 31.
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Blackstone (BX) Beats on Q4 Earnings as Revenues Improve
The Blackstone Group L.P. (BX - Free Report) reported fourth-quarter 2016 economic net income (ENI) of 68 cents per share, which surpassed the Zacks Consensus Estimate of 63 cents. Moreover, the figure compared favorably with 37 cents recorded in the prior-year quarter.
Better-than-expected quarterly results were attributable to a significant increase in revenues. Also, growth in assets under management (AUM) continued to be impressive. However, escalated expenses acted as a major headwind.
For the quarter, Blackstone reported ENI of $811.6 million, up 86% year over year.
For 2016, the company’s ENI of $2.00 per share was above the Zacks Consensus Estimate of $1.95. Also, the figure grew 10% year over year. ENI of $2.39 billion increased 11% from the 2015 level.
Revenues Rise, Costs Jump
Total revenue (GAAP basis) increased 75% year over year to $1.57 billion. The rise was mainly due to significant rise in performance fees as well as higher fee, and interest and dividend revenues, partially offset by investment loss. Further, it handily surpassed the Zacks Consensus Estimate of $1.43 billion.
For 2016, total revenue (GAAP basis) was $5.13 billion, which outpaced the Zacks Consensus Estimate of $4.91 billion. Also, the figure was 10% above the year-ago level.
Total expenses (GAAP basis) jumped 48% year over year to $824.5 million. The hike was primarily due to a rise in total compensation and benefits, and drastic increase in fund expenses.
Fee-earning AUM grew 13% year over year to $277.1 billion. Total AUM amounted to $366.6 billion as of Dec 31, 2016, up 9% year over year. The rise in total AUM was largely driven by $69.7 billion of gross inflows.
As of Dec 31, 2016, Blackstone had $4.6 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. In addition, current dislocation in the credit markets and increased liquidity pressure are anticipated to create more investment opportunities for the company. However, increased dependence on management and advisory fees can adversely 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 #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Performance of Other Investment Managers
Janus Capital Group, Inc.’s fourth-quarter 2016 adjusted earnings per share of 20 cents lagged the Zacks Consensus Estimate of 24 cents. A fall in revenues and higher expenses were primarily responsible for the lower-than-expected results. However, an increase in average and total AUM (assets under management) was on the positive side.
BlackRock, Inc. (BLK - Free Report) reported fourth-quarter 2016 adjusted earnings of $5.14 per share, which handedly surpassed the Zacks Consensus Estimate of $5.02. The better-than-expected number was primarily driven by a decline in total expenses. Also, higher revenues for the quarter acted as a tailwind.
Among other investment managers, Waddell & Reed Financial, Inc. is slated to release its fourth-quarter 2016 results on Jan 31.
Zacks’ Best Private Investment Ideas
In addition to the recommendations that are available to the public on our website, how would you like to follow all Zacks' private buys and sells in real time?
Our experts cover all kinds of trades… from value to momentum . . . from stocks under $10 to ETF and option moves . . . from stocks that corporate insiders are buying up to companies that are about to report positive earnings surprises. You can even look inside exclusive portfolios that are normally closed to new investors. Starting today, for the next month, you can have unrestricted access. Click here for Zacks' private trades >>