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Blackstone (BX) Q3 Earnings Beat as Revenues Rise, Costs Up

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Blackstone (BX - Free Report) reported third-quarter 2018 economic net income (ENI) of 76 cents per share, which surpassed the Zacks Consensus Estimate of 73 cents. The figure also improved 12% from the prior-year quarter.

Results benefited from increase in revenues, which was supported by growth in assets under management and inflows. However, rise in expenses was the undermining factor.

Blackstone reported ENI of $911.4 million, up 11% year over year.

Revenues & Costs Increase

Total revenues (GAAP basis) grew 11% year over year to $1.92 billion, mainly driven by higher total investment income, and interest and dividend revenues. Also, the top line beat the Zacks Consensus Estimate of $1.82 billion.

Total expenses (GAAP basis) rose 13% year over year to $1.02 billion mainly on a rise in general, administrative and other costs, and total compensation and benefits.

Fee-earning AUM grew 20% year over year to $342.3 billion. Total AUM amounted to $456.7 billion as of Sep 30, 2018, up 18% from the year-ago quarter. The rise in total AUM was largely driven by $24.1 billion of inflows.

As of Sep 30, 2018, Blackstone had $5.4 billion in total cash, cash equivalents and corporate treasury investments and $11.4 billion of cash and net investments.

Capital Deployment Update

Blackstone returned nearly $1 billion to unitholders through a special cash distribution of 10 cents per share and repurchase of 6 million units in the reported quarter. This was part of the company’s previously announced capital deployment program.

Our Viewpoint

Blackstone is well positioned to capitalize on the changing investment landscape by making long-term investments and augmenting its fund-raising abilities. 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

 

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 Manager and Upcoming Releases

BlackRock’s (BLK - Free Report) third-quarter 2018 adjusted earnings of $7.52 per share outpaced the Zacks Consensus Estimate of $6.93. Results benefited from an improvement in revenues, rise in AUM and steady long-term inflows. The uptick in operating expenses was dampening.

Among other investment managers, Ameriprise Financial (AMP - Free Report) and SEI Investments Co. (SEIC - Free Report) are slated to report results on Oct 23.

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