The Blackstone Group L.P. (BX - Free Report) reported second-quarter 2016 economic net income (ENI) of 44 cents per share, which surpassed the Zacks Consensus Estimate of 40 cents. Moreover, the figure was 2% above the prior-year quarter level.
Shares of Blackstone increased more than 2.5% in pre-market trading reflect the markets’ optimism regarding the earnings beat. Notably, the price reaction during the full trading session will provide a better idea about how investors accepted the results.
Better-than-expected results were attributable to a significant decline in expenses and higher total investment income, partially offset by lower performance fees. Also, growth in assets under management (AUM) continued to be impressive.
Blackstone reported ENI of $519.8 million, up 2% year over year.
Lower Revenues Failed to Dent Results
Total revenue (GAAP basis) declined 3% year over year to $1.19 billion. The decline was mainly due to lower performance fees, partially offset by improvement in total investment income, interest and dividend revenue, and other revenue. Further, total revenue beat the Zacks Consensus Estimate of $1.15 billion.
Total expenses (GAAP basis) declined 22% year over year to $712.6 million. The decline was primarily driven by a fall in all cost components.
Fee-earnings AUM grew 11% year over year to $266 billion. Total AUM amounted to $356.3 billion as of Jun 30, 2016, up 7% year over year. The rise in total AUM was largely driven by $70 billion of gross inflows.
As of Jun 30, 2016, Blackstone had $3.5 billion in cash, corporate treasury and liquid investments.
Our Viewpoint
Challenging market conditions resulted in the disappointing revenue performance by Blackstone, but the company remains well positioned to capitalize on the changing investment landscape by making long-term investments as well as augmenting its fund-raising ability, given a robust balance sheet. However, the impact of volatile capital markets and stringent regulations on the company’s near-term profitability makes us apprehensive.
Currently Blackstone carries a Zacks Rank #4 (Sell).
Among other investment managers, Waddell & Reed Financial, Inc. andAmeriprise Financial, Inc. (AMP - Free Report) are scheduled to report on Jul 26, while Invesco Ltd. (IVZ - Free Report) is slated to report on Jul 28.
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The Blackstone Group L.P. (BX - Free Report) reported second-quarter 2016 economic net income (ENI) of 44 cents per share, which surpassed the Zacks Consensus Estimate of 40 cents. Moreover, the figure was 2% above the prior-year quarter level.
Shares of Blackstone increased more than 2.5% in pre-market trading reflect the markets’ optimism regarding the earnings beat. Notably, the price reaction during the full trading session will provide a better idea about how investors accepted the results.
Better-than-expected results were attributable to a significant decline in expenses and higher total investment income, partially offset by lower performance fees. Also, growth in assets under management (AUM) continued to be impressive.
Blackstone reported ENI of $519.8 million, up 2% year over year.
Lower Revenues Failed to Dent Results
Total revenue (GAAP basis) declined 3% year over year to $1.19 billion. The decline was mainly due to lower performance fees, partially offset by improvement in total investment income, interest and dividend revenue, and other revenue. Further, total revenue beat the Zacks Consensus Estimate of $1.15 billion.
Total expenses (GAAP basis) declined 22% year over year to $712.6 million. The decline was primarily driven by a fall in all cost components.
Fee-earnings AUM grew 11% year over year to $266 billion. Total AUM amounted to $356.3 billion as of Jun 30, 2016, up 7% year over year. The rise in total AUM was largely driven by $70 billion of gross inflows.
As of Jun 30, 2016, Blackstone had $3.5 billion in cash, corporate treasury and liquid investments.
Our Viewpoint
Challenging market conditions resulted in the disappointing revenue performance by Blackstone, but the company remains well positioned to capitalize on the changing investment landscape by making long-term investments as well as augmenting its fund-raising ability, given a robust balance sheet. However, the impact of volatile capital markets and stringent regulations on the company’s near-term profitability makes us apprehensive.
Currently Blackstone carries a Zacks Rank #4 (Sell).
Among other investment managers, Waddell & Reed Financial, Inc. andAmeriprise Financial, Inc. (AMP - Free Report) are scheduled to report on Jul 26, while Invesco Ltd. (IVZ - Free Report) is slated to report on Jul 28.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report >>
Zacks Names "Single Best Pick to Double"
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
It’s a little-known chemical company that’s up 65% over last year, yet still dirt cheap. With unrelenting demand, soaring 2022 earnings estimates, and $1.5 billion for repurchasing shares, retail investors could jump in at any time.
This company could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in little more than 9 months and NVIDIA which boomed +175.9% in one year.
Free: See Our Top Stock and 4 Runners Up >>
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