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What's in the Cards for Blackstone (BX) in Q3 Earnings?
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The Blackstone Group L.P. (BX - Free Report) is scheduled to report its third-quarter 2016 results before the opening bell on Thursday, Oct 27.
Last quarter, the company reported a positive earnings surprise of 10%. 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.
Moreover, Blackstone has a decent earnings surprise history, as evident from the chart below:
On the expense side, the overall uptrend in costs is anticipated to have continued in the third quarter, owing to higher compensation and benefit costs, as the company’s well-performing funds require more headcount.
Further, gross inflows are anticipated to have been slightly lower during the quarter. Nonetheless, the company’s strategies are anticipated to generate solid inflows in the long run.
Blackstone remains comparatively immune to the prevalent low interest rate environment as it chiefly deals in asset management and private equity businesses. Moreover, the company continues to expand its investment activity to capitalize on public market dislocation and is likely to report higher deployment of capital during the quarter.
Furthermore, with the improvement in the overall economic scenario, the company’s fund-raising ability should aid the uptrend in its fee-earning AUM and total AUM. This will lead to stable or improving fee income for the company.
However, Blackstone’s activities during the quarter have failed to win the analysts’ confidence. As a result, the Zacks Consensus Estimate for the quarter has declined 5.6% to 51 cents per share over the past seven days.
Earnings Whispers
Our proven model indicates that Blackstone is less likely to beat the earnings estimates this time around. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy) or at least #2 (Buy) or #3 (Hold) for this to happen. Unfortunately, this is not the case here as elaborated below.
Zacks ESP: The Earnings ESP for Blackstone is -3.92%. This is because the Most Accurate estimate of 49 cents is lower than the Zacks Consensus Estimate of 51 cents.
Zacks Rank: Blackstone’s Zacks Rank #3 increases the predictive power of ESP. However, we also need to have a positive ESP to be confident of a positive earnings surprise.
Please check our Earnings ESP Filter that enables you to find stocks that are expected to come out with earnings surprises.
Stocks That Warrant a Look
Here are some stocks you may want to consider as our proven model shows they have the right combination of the elements to beat earnings this season.
Raymond James Financial, Inc. (RJF - Free Report) is slated to release its results on Oct 26. The company has an Earnings ESP of +2.04% and carries a Zacks Rank #2.
Cullen/Frost Bankers, Inc. (CFR - Free Report) has an Earnings ESP of +0.86% and a Zacks Rank #3. It is scheduled to report results on Oct 26.
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What's in the Cards for Blackstone (BX) in Q3 Earnings?
The Blackstone Group L.P. (BX - Free Report) is scheduled to report its third-quarter 2016 results before the opening bell on Thursday, Oct 27.
Last quarter, the company reported a positive earnings surprise of 10%. 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.
Moreover, Blackstone has a decent earnings surprise history, as evident from the chart below:
BLACKSTONE GRP Price and EPS Surprise
BLACKSTONE GRP Price and EPS Surprise | BLACKSTONE GRP Quote
What to Expect in Q3?
On the expense side, the overall uptrend in costs is anticipated to have continued in the third quarter, owing to higher compensation and benefit costs, as the company’s well-performing funds require more headcount.
Further, gross inflows are anticipated to have been slightly lower during the quarter. Nonetheless, the company’s strategies are anticipated to generate solid inflows in the long run.
Blackstone remains comparatively immune to the prevalent low interest rate environment as it chiefly deals in asset management and private equity businesses. Moreover, the company continues to expand its investment activity to capitalize on public market dislocation and is likely to report higher deployment of capital during the quarter.
Furthermore, with the improvement in the overall economic scenario, the company’s fund-raising ability should aid the uptrend in its fee-earning AUM and total AUM. This will lead to stable or improving fee income for the company.
However, Blackstone’s activities during the quarter have failed to win the analysts’ confidence. As a result, the Zacks Consensus Estimate for the quarter has declined 5.6% to 51 cents per share over the past seven days.
Earnings Whispers
Our proven model indicates that Blackstone is less likely to beat the earnings estimates this time around. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy) or at least #2 (Buy) or #3 (Hold) for this to happen. Unfortunately, this is not the case here as elaborated below.
Zacks ESP: The Earnings ESP for Blackstone is -3.92%. This is because the Most Accurate estimate of 49 cents is lower than the Zacks Consensus Estimate of 51 cents.
Zacks Rank: Blackstone’s Zacks Rank #3 increases the predictive power of ESP. However, we also need to have a positive ESP to be confident of a positive earnings surprise.
Please check our Earnings ESP Filter that enables you to find stocks that are expected to come out with earnings surprises.
Stocks That Warrant a Look
Here are some stocks you may want to consider as our proven model shows they have the right combination of the elements to beat earnings this season.
Raymond James Financial, Inc. (RJF - Free Report) is slated to release its results on Oct 26. The company has an Earnings ESP of +2.04% and carries a Zacks Rank #2.
Lazard Ltd. (LAZ - Free Report) is scheduled to report its results on Oct 27.It has an Earnings ESP of +3.90% and carries a Zacks Rank #2. You can see the complete list of today’s Zacks Rank #1 stocks here.
Cullen/Frost Bankers, Inc. (CFR - Free Report) has an Earnings ESP of +0.86% and a Zacks Rank #3. It is scheduled to report results on Oct 26.
Confidential from Zacks
Beyond this Analyst Blog, would you like to see Zacks' best recommendations that are not available to the public? Our Executive VP, Steve Reitmeister, knows when key trades are about to be triggered and which of our experts has the hottest hand. Click to see them now>>