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Blackstone (BX) Stock Down Despite Q3 Earnings Beat, AUM Up
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Blackstone’s (BX - Free Report) third-quarter 2022 distributable earnings of $1.06 per share handily outpaced the Zacks Consensus Estimate of 96 cents. The figure, however, reflects a decline of 17% from the prior-year quarter. Our estimate for the metric was $1.02 per share.
Results primarily benefited a rise in assets under management (AUM) balance, mainly driven by inflows and lower expenses. However, a tough operating environment hampered performance fees and management fees, which led to a fall in revenues. Probably because of this, shares of the company declined 4.2% following the release.
The net income attributable to Blackstone was $2.3 million compared with $1.4 billion in the year-ago quarter.
Segment Revenues & Expenses Decline
Total segment revenues were $2.59 billion, down 15% year over year. The reported figure surpassed the Zacks Consensus Estimate of $2.56 billion. We had also projected total segment revenues of $2.59 billion.
On a GAAP basis, revenues were $1.06 billion, plunging 83%.
Total expenses (GAAP basis) were $961.4 million, down 64%. The decline was due to a fall in total compensation and benefits costs. In the reported quarter, the company recorded negative unrealized performance allocation compensation costs.
As of Sep 30, 2022, Blackstone had $8.7 billion in total cash, cash equivalents and corporate treasury investments and $18.1 billion in cash and net investments. The company has a $4.1-billion credit revolver.
AUM Improves
Fee-earning AUM grew 34% year over year to $705.9 billion as of Sep 30, 2022. Total AUM amounted to $950.9 billion as of the same date, up 30% year over year. The rise in total AUM was largely driven by $44.8 billion of inflows.
We had projected fee-earning AUM and total AUM of $691.3 billion and $964.6 billion, respectively.
As of Jun 30, 2022, undrawn capital available for investment was $182 billion.
Our Take
Blackstone remains well-poised for top-line growth, supported by a continued rise in AUM. The company is expected to keep gaining from its fund-raising ability. However, elevated expenses and a challenging operating backdrop are expected to hurt the bottom line in the near term.
Performance & Earnings Release Date of Other Investment Managers
BlackRock, Inc.’s (BLK - Free Report) third-quarter 2022 adjusted earnings of $9.55 per share surpassed the Zacks Consensus Estimate of $7.93. The figure reflects a decrease of 15.8% from the year-ago quarter.
Results benefited from a decline in expenses. However, lower revenues and AUM balance were the major headwinds for BLK.
Invesco Ltd. (IVZ - Free Report) is scheduled to announce third-quarter 2022 numbers on Oct 25.
Over the past week, the Zacks Consensus Estimate for IVZ’s quarterly earnings has moved 6.5% south to 53 cents, implying a 44.2% decline from the prior-year reported number.
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Blackstone (BX) Stock Down Despite Q3 Earnings Beat, AUM Up
Blackstone’s (BX - Free Report) third-quarter 2022 distributable earnings of $1.06 per share handily outpaced the Zacks Consensus Estimate of 96 cents. The figure, however, reflects a decline of 17% from the prior-year quarter. Our estimate for the metric was $1.02 per share.
Results primarily benefited a rise in assets under management (AUM) balance, mainly driven by inflows and lower expenses. However, a tough operating environment hampered performance fees and management fees, which led to a fall in revenues. Probably because of this, shares of the company declined 4.2% following the release.
The net income attributable to Blackstone was $2.3 million compared with $1.4 billion in the year-ago quarter.
Segment Revenues & Expenses Decline
Total segment revenues were $2.59 billion, down 15% year over year. The reported figure surpassed the Zacks Consensus Estimate of $2.56 billion. We had also projected total segment revenues of $2.59 billion.
On a GAAP basis, revenues were $1.06 billion, plunging 83%.
Total expenses (GAAP basis) were $961.4 million, down 64%. The decline was due to a fall in total compensation and benefits costs. In the reported quarter, the company recorded negative unrealized performance allocation compensation costs.
As of Sep 30, 2022, Blackstone had $8.7 billion in total cash, cash equivalents and corporate treasury investments and $18.1 billion in cash and net investments. The company has a $4.1-billion credit revolver.
AUM Improves
Fee-earning AUM grew 34% year over year to $705.9 billion as of Sep 30, 2022. Total AUM amounted to $950.9 billion as of the same date, up 30% year over year. The rise in total AUM was largely driven by $44.8 billion of inflows.
We had projected fee-earning AUM and total AUM of $691.3 billion and $964.6 billion, respectively.
As of Jun 30, 2022, undrawn capital available for investment was $182 billion.
Our Take
Blackstone remains well-poised for top-line growth, supported by a continued rise in AUM. The company is expected to keep gaining from its fund-raising ability. However, elevated expenses and a challenging operating backdrop are expected to hurt the bottom line in the near term.
Blackstone Inc. Price, Consensus and EPS Surprise
Blackstone Inc. price-consensus-eps-surprise-chart | Blackstone Inc. Quote
Currently, Blackstone carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Performance & Earnings Release Date of Other Investment Managers
BlackRock, Inc.’s (BLK - Free Report) third-quarter 2022 adjusted earnings of $9.55 per share surpassed the Zacks Consensus Estimate of $7.93. The figure reflects a decrease of 15.8% from the year-ago quarter.
Results benefited from a decline in expenses. However, lower revenues and AUM balance were the major headwinds for BLK.
Invesco Ltd. (IVZ - Free Report) is scheduled to announce third-quarter 2022 numbers on Oct 25.
Over the past week, the Zacks Consensus Estimate for IVZ’s quarterly earnings has moved 6.5% south to 53 cents, implying a 44.2% decline from the prior-year reported number.