Back to top

Analyst Blog

This page is temporarily not available.  Please check later as it should be available shortly. If you have any questions, please email customer support at support@zacks.com or call 800-767-3771 ext.  9339.

The Blackstone Group LP 's (BX - Analyst Report) fourth-quarter 2012 economic net income (ENI) came in at 59 cents per share, substantially beating the Zacks Consensus Estimate of 47 cents. Moreover, this compares favorably with earnings of 42 cents recorded in the year-ago quarter.

Better-than-expected results were aided by a substantial growth in top line, which was offset by higher operating expenses to an extent. Moreover, steady asset under management (AUM) and strong balance sheet were the other positives for the quarter.

For full year 2012, ENI came in at $1.77 per share, surpassing the Zacks Consensus Estimate of $1.63. This also compares favorably with the earnings of $1.38 in the previous year.

Blackstone reported ENI of $670.0 million, rising 43.1% from $468.2 million in the prior-year quarter. For 2012, ENI came in at $1,995.3 million, rising 29.6% from $1,539.2 million in 2011.

Behind the Headlines

Blackstone’s total revenue (GAAP basis) grew 33.0% to $1,217.1 million from $915.1 million in the year-ago quarter. This was also ahead of the Zacks Consensus Estimate of $1,101.0 million by 10.5%.

The improvement in revenue was attributable to a solid increase in total performance fees, total investment income as well as interest and dividend revenue, partly offset by a dip in other revenue.

For the full year, total revenue came in at $4,091.4 million, up 23.6% from $3,252.6 million in the previous year. Revenues for the full year reached 9.8% ahead of the Zacks Consensus Estimate of $3,661.0 million.

Total expense (GAAP basis) also inched up 1.6% year over year to $885.7 million. The rise was primarily due to a sizeable hike in total compensation and benefits expenses along with interest expenses. However, these were partly offset by lower fund expenses as well as general, administrative and other costs.

Assets Under Management

Fee-earnings AUM fell marginally 0.4% from $168.6 billion in the last quarter to $167.9 million. However, fee-earnings AUM grew 22.7% year over year from $136.8 billion. The year-over-year increase was attributable to higher gross inflows and market appreciation partly offset by outflows and realizations.

Total AUM as of Dec 31, 2012 was $210.2 billion, up 2.7% from $204.6 billion as of Sep 30, 2012 and 26.5% from 166.2 billion as of Dec 31, 2011. The rise was primarily driven by strong organic net inflows and market appreciation across all asset management segments.

Capital and Liquidity

As of Dec 31, 2012, Blackstone had $2.3 billion in cash and liquid investments. Moreover, the company had $6.7 billion in total cash and investments at the end of the quarter. Furthermore, the company had no borrowings outstanding against its $1.1 billion revolving credit facility, which was amended in Jul 2012. The amendment extended the expiry of the facility to Jul 2017.

Distribution Update

Concurrent with the earnings release, Blackstone announced a quarterly distribution of 42 cents per unit payable on Feb 19 to stockholders of record as of Feb 11.

Performance of Other Asset Mangers

T. Rowe Price Group, Inc. (TROW) reported its fourth-quarter 2012 earnings, a penny below the Zacks Consensus Estimate. Elevated operating expenses were the primary reasons for the earnings miss.

BlackRock, Inc.'s (BLK - Analyst Report) fourth-quarter 2012 adjusted earnings substantially surpassed the Zacks Consensus Estimate. The improvement was primarily attributable to increased top line, partly offset by higher operating expenses.

Waddell & Reed Financial, Inc.’s (WDR - Analyst Report) fourth-quarter 2012 earnings from continuing operations were slightly ahead of the Zacks Consensus Estimate. Better-than-expected results benefited from augmented top line, partially offset by higher expenses.

Our Viewpoint

Investment appreciation in Blackstone, along with the growing need for risk management and alternative investment solutions within the financial service industry, is expected to contribute positively to the company over the long run.

Moreover, its sound dividend policy will reinforce investors’ confidence. In spite of posting good results in the quarter, the persistent sluggish economic recovery will continue to keep the company’s financials under pressure in the near term.

Currently, Blackstone retains a Zacks Rank #3 (Hold).

Please login to Zacks.com or register to post a comment.

New to Zacks?

Start Here

Zacks Investment Research

Close

Are you a new Zacks Member or a visitor to Zacks.com?

Top Zacks Features

Learn more

Start for as little as $4.50 per trade.

My Portfolio Tracker

Is it Time to Sell?

One of the most important steps you can take today is to set up your portfolio tracker on Zacks.com. Once you do, you'll be notified of major events affecting your stocks and/or funds with daily email alerts.

More Zacks Resources

Zacks Rank Home - Evaluate your stocks and use the Zacks Rank to eliminate the losers and keep the winners.

Mutual Fund Rank Home - Evaluate your funds with the Mutual Fund Rank for both your personal and retirement funds.

Stock/Mutual Fund Screening - Find better stocks and mutual funds. The ones most likely to beat the market and provide a positive return.

My Portfolio - Track your Portfolio and find out where your stocks/mutual funds stack up with the Zacks Rank.

Zacks #1 Rank Top Movers for Zacks #1 Rank Top Movers

Company Symbol Price %Chg
BITAUTO HOLD BITA 34.08 +10.76%
NOAH HOLDING NOAH 14.01 +5.42%
DIXIE GROUP DXYN 14.68 +4.41%
VALEO SA SPO VLEEY 68.09 +4.22%
CANADIAN SOL CSIQ 26.13 +3.79%