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Growth in AUM Likely to Support Blackstone's (BX) Q3 Earnings
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Blackstone (BX - Free Report) is scheduled to report third-quarter 2022 results on Oct 20, before the opening bell. Its revenues and earnings are likely to have declined in the to-be-reported quarter on a year-over-year basis.
In the last reported quarter, the company’s earnings surpassed the Zacks Consensus Estimate. Results primarily benefited from an improvement in revenues and lower expenses. A rise in the assets under management (AUM) balance, mainly driven by inflows, was a positive.
Blackstone has an impressive earnings surprise history. Its earnings surpassed the Zacks Consensus Estimate in each of the trailing four quarters, the average surprise being 27.5%.
Business prospects and activities of the company in the third quarter did not win analysts’ confidence. As a result, the Zacks Consensus Estimate for its third-quarter earnings of 97 cents per share has been revised 4.9% lower over the past seven days. The figure indicates a decline of 24.2% from the prior-year quarter’s reported number. Our estimate for earnings is $1.02, which indicates a year-over-year decline of 20.6%.
The consensus estimate for sales is pegged at $2.58 billion, which suggests a fall of 15.1% from the year-ago quarter’s reported figure. Our estimate for the same is $2.59 billion, implying a decline of 14.8%.
Now, let’s check the factors that are expected to have influenced the company’s third-quarter performance.
Key Factors and Estimates for Q3
Blackstone has been witnessing a rise in fee-earning AUM and total AUM for the past few years on the back of its diversified product and revenue mix, a superior position in the alternative investments space, and net inflows. A similar trend is likely to have continued in the to-be-reported quarter.
After witnessing a gradual normalization in the second half of 2021, trading activities rebounded in the first half of 2022, with the trend continuing into the third quarter. Certain developments, including Russia’s invasion of Ukraine and the continued supply-chain disruptions, led to uncertainty among investors.
Fears of a severe economic slowdown amid the ultra-aggressive stance of the central banks across the globe to control inflation drove client activity and trading volumes in the third quarter. Thus, supported by the rise in client activity and expected asset inflows, Blackstone is likely to have recorded growth in the AUM balance.
The Zacks Consensus Estimate for Blackstone’s third-quarter AUM is pegged at $971 billion, which indicates a rise of 32.8% from the prior-year quarter’s reported figure. Our estimate for total AUM is $954.6 billion. The consensus estimate for total fee-earning AUM of $704 billion suggests a year-over-year rise of 33.3%. Our estimate for the same is $691.3 billion.
The Zacks Consensus Estimate for net management and advisory fees (segment revenues) for the to-be-reported quarter is pegged at $1.55 billion, which indicates a rise of 17.3% from the prior-year quarter. Our estimate for the same is $1.30 billion.
The consensus estimate for fee-related performance revenues (segment revenues) of $214 million suggests a significant rise from the prior-year quarter.
Blackstone’s expenses have been elevated over the past few years mainly because of higher general, administrative and other expenses. As the company has been continuing to make investments in franchise, expenses are expected to have risen to some extent in the third quarter. Our estimate for total expenses (GAAP basis) is $3.15 billion, implying a year-over-year rise of 18.7%.
Here is what our quantitative model predicts:
According to our quantitative model, the chances of Blackstone beating the Zacks Consensus Estimate this time are high. This is because it has the right combination of the two key ingredients — a positive Earnings ESP and Zacks Rank #3 (Hold) or better.
You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Earnings ESP: The Earnings ESP for Blackstone is +2.23%.
Zacks Rank: The company currently carries a Zacks Rank #3.
Other Stocks That Warrant a Look
A couple of other finance stocks, which you may want to consider, as these too have the right combination of elements to post an earnings beat in their upcoming releases per our model, are Associated BancCorp (ASB - Free Report) and BankUnited (BKU - Free Report) .
The Earnings ESP for Associated BancCorp is +0.57% and it carries a Zacks Rank #3 at present. The company is slated to report third-quarter 2022 results on Oct 20.
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Growth in AUM Likely to Support Blackstone's (BX) Q3 Earnings
Blackstone (BX - Free Report) is scheduled to report third-quarter 2022 results on Oct 20, before the opening bell. Its revenues and earnings are likely to have declined in the to-be-reported quarter on a year-over-year basis.
In the last reported quarter, the company’s earnings surpassed the Zacks Consensus Estimate. Results primarily benefited from an improvement in revenues and lower expenses. A rise in the assets under management (AUM) balance, mainly driven by inflows, was a positive.
Blackstone has an impressive earnings surprise history. Its earnings surpassed the Zacks Consensus Estimate in each of the trailing four quarters, the average surprise being 27.5%.
Blackstone Inc. Price and EPS Surprise
Blackstone Inc. price-eps-surprise | Blackstone Inc. Quote
Business prospects and activities of the company in the third quarter did not win analysts’ confidence. As a result, the Zacks Consensus Estimate for its third-quarter earnings of 97 cents per share has been revised 4.9% lower over the past seven days. The figure indicates a decline of 24.2% from the prior-year quarter’s reported number. Our estimate for earnings is $1.02, which indicates a year-over-year decline of 20.6%.
The consensus estimate for sales is pegged at $2.58 billion, which suggests a fall of 15.1% from the year-ago quarter’s reported figure. Our estimate for the same is $2.59 billion, implying a decline of 14.8%.
Now, let’s check the factors that are expected to have influenced the company’s third-quarter performance.
Key Factors and Estimates for Q3
Blackstone has been witnessing a rise in fee-earning AUM and total AUM for the past few years on the back of its diversified product and revenue mix, a superior position in the alternative investments space, and net inflows. A similar trend is likely to have continued in the to-be-reported quarter.
After witnessing a gradual normalization in the second half of 2021, trading activities rebounded in the first half of 2022, with the trend continuing into the third quarter. Certain developments, including Russia’s invasion of Ukraine and the continued supply-chain disruptions, led to uncertainty among investors.
Fears of a severe economic slowdown amid the ultra-aggressive stance of the central banks across the globe to control inflation drove client activity and trading volumes in the third quarter. Thus, supported by the rise in client activity and expected asset inflows, Blackstone is likely to have recorded growth in the AUM balance.
The Zacks Consensus Estimate for Blackstone’s third-quarter AUM is pegged at $971 billion, which indicates a rise of 32.8% from the prior-year quarter’s reported figure. Our estimate for total AUM is $954.6 billion. The consensus estimate for total fee-earning AUM of $704 billion suggests a year-over-year rise of 33.3%. Our estimate for the same is $691.3 billion.
The Zacks Consensus Estimate for net management and advisory fees (segment revenues) for the to-be-reported quarter is pegged at $1.55 billion, which indicates a rise of 17.3% from the prior-year quarter. Our estimate for the same is $1.30 billion.
The consensus estimate for fee-related performance revenues (segment revenues) of $214 million suggests a significant rise from the prior-year quarter.
Blackstone’s expenses have been elevated over the past few years mainly because of higher general, administrative and other expenses. As the company has been continuing to make investments in franchise, expenses are expected to have risen to some extent in the third quarter. Our estimate for total expenses (GAAP basis) is $3.15 billion, implying a year-over-year rise of 18.7%.
Here is what our quantitative model predicts:
According to our quantitative model, the chances of Blackstone beating the Zacks Consensus Estimate this time are high. This is because it has the right combination of the two key ingredients — a positive Earnings ESP and Zacks Rank #3 (Hold) or better.
You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Earnings ESP: The Earnings ESP for Blackstone is +2.23%.
Zacks Rank: The company currently carries a Zacks Rank #3.
Other Stocks That Warrant a Look
A couple of other finance stocks, which you may want to consider, as these too have the right combination of elements to post an earnings beat in their upcoming releases per our model, are Associated BancCorp (ASB - Free Report) and BankUnited (BKU - Free Report) .
The Earnings ESP for Associated BancCorp is +0.57% and it carries a Zacks Rank #3 at present. The company is slated to report third-quarter 2022 results on Oct 20.
BankUnited is also scheduled to release third-quarter 2022 earnings on Oct 20. The company, which carries a Zacks Rank #3 at present, has an Earnings ESP of +1.32%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.