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Blackstone’s (BX - Free Report) second-quarter 2023 distributable earnings of 93 cents per share surpassed the Zacks Consensus Estimate by a penny. The figure, however, reflects a decline of 37.6% from the prior-year quarter.
Results primarily benefited from a rise in the assets under management (AUM) balance, mainly driven by decent inflows. However, a tough operating environment hurt performance fees, which led to a fall in segment revenues. Also, higher GAAP expenses hurt results to an extent.
Net income attributable to Blackstone was $601.3 million against a net loss of $29.4 million in the year-ago quarter. Our estimate for the metric was $448.4 million.
Segment Revenues Decline, GAAP Expenses Rise
Total segment revenues were $2.35 billion, down 43.4% year over year. The top line missed the Zacks Consensus Estimate of $2.38 billion.
On a GAAP basis, revenues were $2.81 billion, increasing significantly year over year. We projected GAAP revenues of $2.02 billion.
Total expenses (GAAP basis) were $1.48 billion, up 98.3% year over year. The increase was due to a rise in all cost components except for general, administrative and other expenses. Our estimate for the metric was $1.41 billion.
As of Jun 30, 2023, Blackstone had $8.3 billion in total cash, cash equivalents and corporate treasury investments, and $17.1 billion in cash and net investments. The company has a $4.1-billion undrawn credit revolver.
AUM Improves
Fee-earning AUM grew 7% year over year to $731.15 billion as of Jun 30, 2023. Total AUM amounted to $1 trillion as of the same date, up 6%. The rise in total AUM was primarily driven by $30.1 billion in inflows in the reported quarter.
We had projected fee-earning AUM and total AUM of $737.2 billion and $979.7 billion, respectively.
As of Jun 30, 2023, the undrawn capital available for investment was $194.5 billion.
Our Take
Blackstone is 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, high expenses and a challenging operating backdrop are expected to hurt the bottom line in the near term.
Performance & Earnings Release Date of Other Asset Managers
BlackRock, Inc.’s (BLK - Free Report) second-quarter 2023 adjusted earnings of $9.28 per share handily surpassed the Zacks Consensus Estimate of $8.47. However, the figure reflects an increase of 26% from the year-ago quarter.
BLK’s results benefited from a decline in expenses and higher non-operating income. Further, the AUM balance witnessed improvement. However, lower revenues acted as a headwind for BLK.
Invesco’s (IVZ - Free Report) is slated to announce second-quarter 2023 numbers on Jul 25.
Over the past week, the Zacks Consensus Estimate for Invesco’s quarterly earnings has moved 2.6% north to 40 cents, implying a 2.6% rise from the prior-year reported number.
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Blackstone (BX) Q2 Earnings Beat Estimates, Expenses Rise Y/Y
Blackstone’s (BX - Free Report) second-quarter 2023 distributable earnings of 93 cents per share surpassed the Zacks Consensus Estimate by a penny. The figure, however, reflects a decline of 37.6% from the prior-year quarter.
Results primarily benefited from a rise in the assets under management (AUM) balance, mainly driven by decent inflows. However, a tough operating environment hurt performance fees, which led to a fall in segment revenues. Also, higher GAAP expenses hurt results to an extent.
Net income attributable to Blackstone was $601.3 million against a net loss of $29.4 million in the year-ago quarter. Our estimate for the metric was $448.4 million.
Segment Revenues Decline, GAAP Expenses Rise
Total segment revenues were $2.35 billion, down 43.4% year over year. The top line missed the Zacks Consensus Estimate of $2.38 billion.
On a GAAP basis, revenues were $2.81 billion, increasing significantly year over year. We projected GAAP revenues of $2.02 billion.
Total expenses (GAAP basis) were $1.48 billion, up 98.3% year over year. The increase was due to a rise in all cost components except for general, administrative and other expenses. Our estimate for the metric was $1.41 billion.
As of Jun 30, 2023, Blackstone had $8.3 billion in total cash, cash equivalents and corporate treasury investments, and $17.1 billion in cash and net investments. The company has a $4.1-billion undrawn credit revolver.
AUM Improves
Fee-earning AUM grew 7% year over year to $731.15 billion as of Jun 30, 2023. Total AUM amounted to $1 trillion as of the same date, up 6%. The rise in total AUM was primarily driven by $30.1 billion in inflows in the reported quarter.
We had projected fee-earning AUM and total AUM of $737.2 billion and $979.7 billion, respectively.
As of Jun 30, 2023, the undrawn capital available for investment was $194.5 billion.
Our Take
Blackstone is 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, high 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 Asset Managers
BlackRock, Inc.’s (BLK - Free Report) second-quarter 2023 adjusted earnings of $9.28 per share handily surpassed the Zacks Consensus Estimate of $8.47. However, the figure reflects an increase of 26% from the year-ago quarter.
BLK’s results benefited from a decline in expenses and higher non-operating income. Further, the AUM balance witnessed improvement. However, lower revenues acted as a headwind for BLK.
Invesco’s (IVZ - Free Report) is slated to announce second-quarter 2023 numbers on Jul 25.
Over the past week, the Zacks Consensus Estimate for Invesco’s quarterly earnings has moved 2.6% north to 40 cents, implying a 2.6% rise from the prior-year reported number.